Nursing the Malaysian Economy

In: Business and Management

Submitted By billlow
Words 1017
Pages 5
Executive Summary
The Malaysian economy has been experiencing waves and waves of turmoil from multiple macroeconomics aspect for the past few years and it is no longer resilient as it used to be. There is no short cut to do a quick fix to our ailing economy and reviving it to a strong and sustainable growth path will require a long term effort. Therefore by understanding the factors that contributed to its demised will allow us to better evaluate if a particular approach to safe the economy is potentially viable or just another disastrous attempt. Thus, we have to meticulously examine every long term step that we take.

The Factors
According to Esther (2015a) one of the factors contributing to the fall of our economy is declining private consumption growth. Private consumption indicates the consumption of goods and services by households and it has been slowly declining over the past few years. Private consumption growth was at 8.2% in 2012, 7.2% in 2013 and drops back to 7.1% in 2014. The projection by Bank Negara for year 2015 is 6%. Consumers are holding back their spending during school holidays, festive seasons and yearend sales. This is mostly due to cautious spending by the consumers. Most of the retailers suffered a drop in their profit margin.

Malaysia is still a resource-based country and the Government is heavily dependent on oil revenue. The country’s oil-related revenue is at RM63 billion in 2013, it accounts for 29.5% of the total government income. Falling global oil prices is now causing Malaysia’s oil-related revenue to drop from 5.9% of the GDP in 2014 to 3.1% of the GDP at current year 2015. (Malay Mail Online, 2015) Since 2014 oil price has been dropping from over USD$100 per barrel to around USD$50 within the duration of a few months. The reason for the fall is due to weak demand in many countries that is experiencing weak economic…...

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