Economic equilibrium in Malaysia After retreat

With Bank Negara Malaysia (herein referred to as "Bnm") declaring in the month of September that its Monetary & Financial Developments August 2009, the Malaysian economy faces stable interest rates, quiz, for financing in the housing commerce is sustained and the capital shop moderated, it seems certain that Malaysia may be seeing at a very certain economic outlook arrival 2010.

There were previous speculations about the domino result this Great retreat has on Malaysia will last about 2-3 years; albeit its heavy political activities and shrewd financial stability mentality that was placed on Malaysians by varied mass and alternative media.

News From Malaysia

Locally speaking, Malaysia is seen to be performing quite well in this retreat - Bnm's net non-performing loans ratio remains at 2.1% as of August 2009, as many other banks stood at an approximate outline of 3.65%. Deutsche Bank however, was forecasted to a high of 15% non-performing loan ratios (herein referred to as "Npl") for the next 12 months beginning October 2009.

The mean Base Lending Rates (Blr) in Malaysia stands at 5.53% on July, decreasing to a low of 5.51% at the end of August.

For more practically a decade now, citizens of the world mainly financiers and political leaders have all the time craved for economic stability, sustainability and predictability: Even depicted in the G20 summit. But what is the shape of the economy after this modern economic turmoil, and how would we reshape it?

Economy Focus: Malaysia The Gdp chart above (by Dept. Of Statistics Malaysia) shows a very sharp decline at the expected bottom-out -6.2% in Quarter 1 of 2009. Over the period of time, production for exports have declined, oil price was down to a low of Us/barrel and the producer price index showed decline compared from January - August 2008 and 2009.

Some of the other absorbing figures are also unemployment rates, commodity prices, global stock shop prices, foreign currency replacement value and manufacturing production of vital Malaysian exports. Interestingly, the balance of payments figures are depicted as below.

Balance of Payments - Malaysia for 2007 - Q1 2009

According to the Malaysian division of Statistics,

The current list recorded a surplus of Rm28.8 billion (equivalent to 17.8% of Gdp) in the second quarter of 2009, down from Rm31.4 billion from the preceding quarter (-Rm2.7 billion or -8.5%). The decrease was as a result of lower surplus on goods of Rm33.1 billion from Rm37.0 billion in the earlier quarter (-Rm3.8 billion or -10.4%), and services of Rm1.0 billion (Q1 2009: Rm2.5 billion). Meanwhile, other components in current list showed an improved performance as follows:

a lower net payments on wage list of Rm1.5 billion (Q1 2009: -Rm3.9 billion); and a lower leakage on current transfers of Rm3.9 billion (Q1 2009: -Rm4.2 billion)

Malaysia vs. Other economies Household debts are still worryingly high in United States, and healthcare is often a concern. It has been said 'worryingly' for many times that Americans are spending too much, wanting a lot of amenities but are not paying enough for it. Consumer spending has dropped, but cost of capital and Consumer prices index has increased. This negatively effects the economy as prices will be higher and consumers do not spend as much - Leaving local monetary circulation volatility at a much lower rate.

In Malaysia, banks were having strong capitalization and stable Npl, sustained fund raising volatility in the capital market, gross financing to the secret sector was moderated and M3 (broad money) grew at a faster every year rate at 7.6%.

Economic equilibrium in Malaysia After retreat

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