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

India: Exports Lead Industrial Rebound, While Fiscal Policy Remains Prudent

India: Capex- & Export-Led Rebound Likely to Receive Fiscal and Monetary Fillip Too

Receding 2nd Wave Will Allow Economic Acceleration, Spurred by Rate Cuts to Come

Clear Recovery in Jan-Mar, Accelerating Sharply in Apr'21; Ample Scope for Stimulus

India: 2nd Covid Wave Will Delay (Not Halt) The Strength of the Economic Rebound

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 posted a current account surplus (0.9% of GDP) in FY2020/21, the first annual surplus since FY2003/04 (the last year of the first BJP-led NDA government). That, coupled with net FDI of US$44 billion and net FPI of US$36 billion, ensured an overall balance of payments surplus of US$87.3 billion in the pandemic year, FY2020/21. The strength of the external balance allows India to boost aggregate demand more aggressively in FY2021/22. Merchandise exports expanded 114% YoY in April-May 2021 (the first 2 months of FY2021/22), with the 69% YoY growth in May suggesting that exports rode out the severity of the Second Covid Wave relatively unscathed. Imports expanded 109% YoY in April-May 2021, reflecting a powerful rebound in domestic demand (albeit one that was restrained by partial lockdowns in May). The rebound in industrial production (+134% YoY) and manufacturing (+197% YoY) in April 2021 was spectacular. Although May will likely see a deceleration, India's steel output grew 47% YoY in May, setting the pace among the world's top steel producers with 33.6% YoY growth in Jan-May 2021. We retain our forecast of 11% real GDP growth in FY2021/22, and 8% in FY2022/23. The virulent Second Wave of Covid has receded, with the 7-day moving average of new Covid cases falling below 50,000 in the past week (from a peak above 392,000 on 8 May). Vaccinations have accelerated sharply since the federal government took charge on 21 June (and funded free vaccines for all adults), but only 33% of all adults (270 million individuals) have received at least one vaccine dose, of whom 57 million (7% of all adults) have been fully vaccinated. This is far from achieving herd immunity, but widespread vaccinations ensure that any third wave will have a much less negative impact on the economy. Despite stretched valuations, we are bullish on India equities, as the strong economic recovery will boost earnings, alleviating the overvaluation.

India posted a current account surplus (0.9% of GDP) in FY2020/21, the first annual surplus since FY2003/04 (the last year of the first BJP-led NDA government). That, coupled with net FDI of US$44 billion and net FPI of US$36 billion, ensured an overall balance of payments surplus of US$87.3 billion in the pandemic year, FY2020/21. The strength of the external balance allows India to boost aggregate demand more aggressively in FY2021/22. Merchandise exports expanded 114% YoY in April-May 2021 (the first 2 months of FY2021/22), with the 69% YoY growth in May suggesting that exports rode out the severity of the Second Covid Wave relatively unscathed. Imports expanded 109% YoY in April-May 2021, reflecting a powerful rebound in domestic demand (albeit one that was restrained by partial lockdowns in May). The rebound in industrial production (+134% YoY) and manufacturing (+197% YoY) in April 2021 was spectacular. Although May will likely see a deceleration, India's steel output grew 47% YoY in May, setting the pace among the world's top steel producers with 33.6% YoY growth in Jan-May 2021. We retain our forecast of 11% real GDP growth in FY2021/22, and 8% in FY2022/23. The virulent Second Wave of Covid has receded, with the 7-day moving average of new Covid cases falling below 50,000 in the past week (from a peak above 392,000 on 8 May). Vaccinations have accelerated sharply since the federal government took charge on 21 June (and funded free vaccines for all adults), but only 33% of all adults (270 million individuals) have received at least one vaccine dose, of whom 57 million (7% of all adults) have been fully vaccinated. This is far from achieving herd immunity, but widespread vaccinations ensure that any third wave will have a much less negative impact on the economy. Despite stretched valuations, we are bullish on India equities, as the strong economic recovery will boost earnings, alleviating the overvaluation.  

Export-Led Recovery to Broaden as 2nd Covid Wave Recedes