Ever since Fitch downgraded Malaysia's economic outlook from "stable" to "negative", I had always been curious about the Malaysian economy.
Are we really that bad? Downgrading it to a "negative" means that investors lack the confidence in our Government's ability to manage our debts and deficits.
And the price of USD strengthened, against the Ringgit (our Ringgit hit the lowest since 2011, apparently). We saw outflows as much as RM11 billion in the bonds market and RM3-4 billion in the stock market. Is this a region thing? A world thing? Or just us?
A few weeks ago, Bank Negara revised its views on Malaysia's GDP from 5-6% to 4.5-5%. And then of course, the oil price hike (actually, it's a cut in petrol subsidy) where the Government cited that the subsidy cuts could save the country RM1.16 billion. (Can't remember where I read it.) Tapi, at the same time, Government is giving more BR1M money.
Inflow (less subsidy) vs Outflow (BR1M payouts) = ?
Tapi Fitch punya ratings tu, memang worrying. On one hand, I've read our politicians saying that we can't rely on these ratings. After all, these ratings are not necessarily accurate. (Analysts at Moody's, Standard & Poor's and Fitch all maintained at least A ratings on AIG and Lehman Brothers, only to find these companies declaring bankruptcy a few months later.)
So yeah. We can't really rely on the ratings.. but investors still look at these ratings. Ye lah. Not everything is perfect but they need some sort of benchmarking and analysis kan?
Anyway, back to our economy. It still doesn't look so good. Maybe now is not the right time to switch jobs or start your own business.. Maybe lah..
Are we really that bad? Downgrading it to a "negative" means that investors lack the confidence in our Government's ability to manage our debts and deficits.
And the price of USD strengthened, against the Ringgit (our Ringgit hit the lowest since 2011, apparently). We saw outflows as much as RM11 billion in the bonds market and RM3-4 billion in the stock market. Is this a region thing? A world thing? Or just us?
A few weeks ago, Bank Negara revised its views on Malaysia's GDP from 5-6% to 4.5-5%. And then of course, the oil price hike (actually, it's a cut in petrol subsidy) where the Government cited that the subsidy cuts could save the country RM1.16 billion. (Can't remember where I read it.) Tapi, at the same time, Government is giving more BR1M money.
Inflow (less subsidy) vs Outflow (BR1M payouts) = ?
Tapi Fitch punya ratings tu, memang worrying. On one hand, I've read our politicians saying that we can't rely on these ratings. After all, these ratings are not necessarily accurate. (Analysts at Moody's, Standard & Poor's and Fitch all maintained at least A ratings on AIG and Lehman Brothers, only to find these companies declaring bankruptcy a few months later.)
So yeah. We can't really rely on the ratings.. but investors still look at these ratings. Ye lah. Not everything is perfect but they need some sort of benchmarking and analysis kan?
Anyway, back to our economy. It still doesn't look so good. Maybe now is not the right time to switch jobs or start your own business.. Maybe lah..
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