Economist, Centennial Asia Advisors

Nicholas Chia

Economist

Centennial Asia Advisors

At Centennial Asia Advisors, we tell it like it is. We have no vested interests, no need for a China wall, and no reason to skew our outlook any other way. With over 30 years experience covering Asia’s political economy, you can be sure our conclusions and analyses are based on the unadulterated facts. Through years of fine-tuning our research methodologies, we deliver a quality of macroeconomic analysis few other houses can match.

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Economic Policy and Strategic Advisors

Macroeconomics

<ul>
<li>The upbeat 3Q22 GDP speaks to our sanguine outlook for the archipelagic economy. We re-affirm our full-year forecast of 5.3% GDP growth in 2022.</li>
<li>Investments will spearhead growth going forward, driven by the bourgeoning interest in the commodity refining sector, the inflows of manufacturing FDI, and the enduring emphasis on infrastructure development.</li>
<li>Strong growth strengthens BI’s case for further tightening. BI could opt for a smaller 25bps hike, following the moderation in US inflation which buoyed market and risk sentiment.</li>
</ul>


The upbeat 3Q22 GDP speaks to our sanguine outlook for the archipelagic economy. We re-affirm our full-year forecast of 5.3% GDP growth in 2022.
Investments will spearhead growth going forward, driven by the bourgeoning interest in the commodity refining sector, the inflows of manufacturing FDI, and the enduring emphasis on infrastructure development.
Strong growth strengthens BI’s case for further tightening. BI could opt for a smaller 25bps hike, following the moderation in US inflation which buoyed market and risk sentiment.


Indonesia: Chugging Along as 3Q22 Growth Perks Up

<ul>
<li>Inflows of FDI into Indonesia jumped sharply in 3Q22 (+66.4%), by attracting significant investments in the nickel downstream refining sector. </li>
<li>There may also be green shoots of a manufacturing renaissance, given the growing share of FDI into Central and East Java.</li>
<li>The influx of FDI portends well for productivity growth via greater investments and foreign involvement, and stability through a positive basic balance (CA + FDI).</li>
</ul>


Inflows of FDI into Indonesia jumped sharply in 3Q22 (+66.4%), by attracting significant investments in the nickel downstream refining sector. 
There may also be green shoots of a manufacturing renaissance, given the growing share of FDI into Central and East Java.
The influx of FDI portends well for productivity growth via greater investments and foreign involvement, and stability through a positive basic balance (CA + FDI).


Indonesia: Bright Portents From Influx Of FDI

<ul>
<li>The opposition Congress Party made its job of returning to power harder by electing an 80-year old loyalist of the Gandhi family to head the party.</li>
<li>In a nutshell, the credibility of the Congress Party is diminished by the perceived fact that the Gandhi family is not able to truly relinquish control of the party leadership.</li>
<li>That is not to say that the Congress party will disappear from India’s political map altogether, although regional parties will be key in future general elections.</li>
</ul>


The opposition Congress Party made its job of returning to power harder by electing an 80-year old loyalist of the Gandhi family to head the party.
In a nutshell, the credibility of the Congress Party is diminished by the perceived fact that the Gandhi family is not able to truly relinquish control of the party leadership.
That is not to say that the Congress party will disappear from India’s political map altogether, although regional parties will be key in future general elections.


India: Opposition Congress Party Struggles To Re-Invent Itself

<ul>
<li>Three key factors will shape the 2024 race: First, the qualities that the candidates themselves bring to the contest.</li>
<li>Second, political parties are re-positioning themselves for the 2024 elections. The Gerindra party moved first to nominate Prabowo as its presidential candidate, while non-aligned parties did the same with Anies. </li>
<li>The popular incumbent President Jokowi retains sufficient political clout to have a strong say. He will want to ensure that a candidate who will preserve his reform agenda succeeds him.</li>
</ul>


Three key factors will shape the 2024 race: First, the qualities that the candidates themselves bring to the contest.
Second, political parties are re-positioning themselves for the 2024 elections. The Gerindra party moved first to nominate Prabowo as its presidential candidate, while non-aligned parties did the same with Anies. 
The popular incumbent President Jokowi retains sufficient political clout to have a strong say. He will want to ensure that a candidate who will preserve his reform agenda succeeds him.


Indonesia: 2024 Presidential Election Is Shaping Up Into A 3-Horse Race

<ul>
<li>In the Philippines, the bottom-up indicators paint a sanguine picture for the economy.</li>
<li>Manufacturing held up, labour market conditions improved further, and NPLs trended down.</li>
<li>Watch for lagged effects of rate hikes moving forward, with an expected ~300bps in rate hikes this year.</li>
</ul>


In the Philippines, the bottom-up indicators paint a sanguine picture for the economy.
Manufacturing held up, labour market conditions improved further, and NPLs trended down.
Watch for lagged effects of rate hikes moving forward, with an expected ~300bps in rate hikes this year.


The Philippines: All Indicators Flashing Green

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