Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

PK Basu has 34 years experience covering Asia's economies and markets (equities, fixed income and currencies), including 20 years covering the global economy. He was Chief Economist (SE Asia & India) at Credit Suisse First Boston for 5 years, and Chief Asia (x-Jpn) Economist at Daiwa Securities for a similar period. Among other roles, he was global head of research at Maybank Kim Eng, Malaysia equity research head and chief ASEAN economist at Macquarie, Chief Economist at ICICI Securities, ASEAN economist at UBS and the first chief economist at Khazanah Nasional (where he was co-head of research, and led all agri-business initiatives). PK Basu started his career in the Asia Service of WEFA (Wharton Econometrics) in Philadelphia in 1990, rising to be Director of their Asia Service in June 1994. 
PK's book, "Asia Reborn: A continent rises from the ravages of Colonialism and War to a New Dynamism" won the Tata Literature First Book Award (non-fiction) for 2018. It is the first single chronicle of the modern economic and political history of the whole of Asia (from Iraq and Turkey to Korea and Japan, and everything in between), told from an Asian perspective.

Chief Economist & Political Strategist

Cyclical Growth Momentum Restored by a Fiscal Spur Amid Receding Clouds

REAL-Economics.com

Macroeconomics

Productivity grew 2.5% YoY in 4Q 2016-1Q 2017, the fastest half-year performance in 5 years -- but that was made possible by the slowest net employment growth in 13 years. The fiscal stimulus of 2Q-4Q 2016 was pulled back sharply YoY in 1Q 2017, contributing to the mild deceleration in real GDP growth at the start of 2017. The mild pickup in productivity owed mainly to the PIC incentives, not to any turnaround in machinery investment. And sluggish investment commitments suggest that machinery investment will stay in the doldrums. With Singapore's bid to become a hub for commodity-based financing (centred around oil-services players like Ezra and Ezion, and commodity traders like Noble and Olam) lying in shambles, and the financial services sector succumbing to the impact of disruptive technologies, we expect a third year of sub-3% growth.  The cyclical growth momentum that we expected for September 2016-March 2017 did come through, but the Singapore economy has decelerated in April, and the forward-looking cyclical indicators suggest that real GDP will struggle to reach 3% YoY growth in 2017 (a desultory outcome after 2 years of sub-2% growth in 2015-16). Although pharmaceuticals (notoriously volatile month to month) had a disproportionate impact on April's export numbers, non-oil retained imports suggest that exports will be weaker in the rest of 2Q 2017 than in 1Q.With the local population ageing, and net immigration restricted, Singapore is perforce moving to a permanently lower growth trajectory. The financial vulnerabilities in indebted commodity-related companies add another dimension of fragility to Singapore's economy, which will be less capable of withstanding regional shocks (e.g., from the China bubble bursting) unless Singapore is willing to ease the curbs on net immigration and use more of its ample fiscal ammunition to provide a more consistent fiscal stimulus amid a global slowdown.

Productivity grew 2.5% YoY in 4Q 2016-1Q 2017, the fastest half-year performance in 5 years -- but that was made possible by the slowest net employment growth in 13 years. The fiscal stimulus of 2Q-4Q 2016 was pulled back sharply YoY in 1Q 2017, contributing to the mild deceleration in real GDP growth at the start of 2017. The mild pickup in productivity owed mainly to the PIC incentives, not to any turnaround in machinery investment. And sluggish investment commitments suggest that machinery investment will stay in the doldrums. With Singapore's bid to become a hub for commodity-based financing (centred around oil-services players like Ezra and Ezion, and commodity traders like Noble and Olam) lying in shambles, and the financial services sector succumbing to the impact of disruptive technologies, we expect a third year of sub-3% growth.  The cyclical growth momentum that we expected for September 2016-March 2017 did come through, but the Singapore economy has decelerated in April, and the forward-looking cyclical indicators suggest that real GDP will struggle to reach 3% YoY growth in 2017 (a desultory outcome after 2 years of sub-2% growth in 2015-16). Although pharmaceuticals (notoriously volatile month to month) had a disproportionate impact on April's export numbers, non-oil retained imports suggest that exports will be weaker in the rest of 2Q 2017 than in 1Q.With the local population ageing, and net immigration restricted, Singapore is perforce moving to a permanently lower growth trajectory. The financial vulnerabilities in indebted commodity-related companies add another dimension of fragility to Singapore's economy, which will be less capable of withstanding regional shocks (e.g., from the China bubble bursting) unless Singapore is willing to ease the curbs on net immigration and use more of its ample fiscal ammunition to provide a more consistent fiscal stimulus amid a global slowdown.  

Singapore: Short-Lived Cyclical Rebound Is Fading