Well based on my understandings , this is my review on Malaysia's economic. At the moment , Msia is having a different kind of economic problem, the one which we dont study in textbooks.( i hoped im right ! ) We are experiencing what i call an inflation, but with some characteristics of recession. Here are the points :
1) General price level of GnS are increasing. Seriously, the nasi lemak which cost 2bucks now cost 5bucks !!Which might be cause by increased in oil prices ( i'll comment on that later )
2) Malaysia currency is actually depreciating ( dont listen to our govt's nonsense ) which makes things worse as we all noe we're an importing country of many GnS, such as educations & high tech stuff. Thus, resulting cost push inflation.
However, heres the catch. Alot of ppl are actually losing jobs all over the world including Msia. For example, starbucks has been shutting down outlets, thus creating unemployment. Usually inflation happens when there is a excessive demand in the market which pushes the price level up. But the thing is, ppl are losing their jobs bt at the same time experiencing increase in price levels. So imagine this,we are unemployed & jobless but the same time we still must bear the higher cost of living, bcause as we noe it we cant live without food and fuel right ? WHAT SHOULD WE DO !! EXPANSIONARY FISCAL & MONETARY POLICY ? no it would just make things worse. SS side policy perhaps.But with cheaper alternatives in China & India, who wants to invest here ?! Plus with the poltical instability in our country, I am afraid its just not possible.
Doomed.I hoped not.All those US economists better think of something fast to cure the recession in US cause Msia is very much depandant on America & I sure dont like the way our country's economic is going. Dont play-play, this is just the begining.*gulp
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