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, 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

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CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

India has bucked the global trend by growing its total government spending by only 0.4% YoY in April-October 2020. But the economic recovery caused tax revenue to rise 16.9% YoY in October 2020, and the fiscal deficit should consequently decline steadily in the second half of the fiscal year, helping to crowd-in private investment. As supply disruptions ease, CPI inflation should edge below 6% YoY by January 2021, allowing a 50bp reduction in the policy rate to further kick-start a spectacular economic recovery in 2021 (calendar year) to about 15% real GDP growth. India's real GDP contracted 7.5% YoY in July-September 2020, but will likely need to be revised up because the key Services sectors (including public administration, defence, finance and professional services) were reported to have contracted more in July-September than in the "locked-down" quarter of April-June. On the demand side, government consumption spending declined a severe 22.2% YoY in real terms, private consumption declined 11.3% YoY, and investment spending fell 7.4% YoY, but real net exports added 3.5 percentage points to GDP. Notably, nominal exports of goods and services increased during the quarter (and yet the Services contribution to the output side was sharply negative, suggesting serious measurement errors in the latter). But the overall decline in government spending was a notable restraint on GDP during the quarter. Fiscal restraint has meant that India's total government spending (nominal) in April-October 2020 was up just 0.4% YoY. In October 2020, strong gross tax revenue (+16.9% YoY) enabled the fiscal deficit to decline 43% YoY. As the accelerating economy boosts tax revenues in the months ahead, the fiscal deficit will moderate steadily further, allowing some room for even this extraordinarily fiscally-conservative government to ease the reins on government spending. More importantly, as the supply disruptions from transportation bottlenecks ease, we expect CPI inflation to moderate to below 6% YoY by January 2021, allowing a 50bp reduction in policy rates by March 2021 -- thereby kick-starting a strong economic recovery to 8% YoY in Jan-Mar 2021, around 30% YoY in the next quarter and over 10% YoY in the rest of FY2021/22.

India has bucked the global trend by growing its total government spending by only 0.4% YoY in April-October 2020. But the economic recovery caused tax revenue to rise 16.9% YoY in October 2020, and the fiscal deficit should consequently decline steadily in the second half of the fiscal year, helping to crowd-in private investment. As supply disruptions ease, CPI inflation should edge below 6% YoY by January 2021, allowing a 50bp reduction in the policy rate to further kick-start a spectacular economic recovery in 2021 (calendar year) to about 15% real GDP growth. India's real GDP contracted 7.5% YoY in July-September 2020, but will likely need to be revised up because the key Services sectors (including public administration, defence, finance and professional services) were reported to have contracted more in July-September than in the "locked-down" quarter of April-June. On the demand side, government consumption spending declined a severe 22.2% YoY in real terms, private consumption declined 11.3% YoY, and investment spending fell 7.4% YoY, but real net exports added 3.5 percentage points to GDP. Notably, nominal exports of goods and services increased during the quarter (and yet the Services contribution to the output side was sharply negative, suggesting serious measurement errors in the latter). But the overall decline in government spending was a notable restraint on GDP during the quarter. Fiscal restraint has meant that India's total government spending (nominal) in April-October 2020 was up just 0.4% YoY. In October 2020, strong gross tax revenue (+16.9% YoY) enabled the fiscal deficit to decline 43% YoY. As the accelerating economy boosts tax revenues in the months ahead, the fiscal deficit will moderate steadily further, allowing some room for even this extraordinarily fiscally-conservative government to ease the reins on government spending. More importantly, as the supply disruptions from transportation bottlenecks ease, we expect CPI inflation to moderate to below 6% YoY by January 2021, allowing a 50bp reduction in policy rates by March 2021 -- thereby kick-starting a strong economic recovery to 8% YoY in Jan-Mar 2021, around 30% YoY in the next quarter and over 10% YoY in the rest of FY2021/22. 

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