BANK Negara Malaysia Governor Datuk Muhammad Ibrahim announced earlier this month that the country’s gross domestic product grew by 4.0 percent in the second quarter of this year (April to June), slightly slower than 4.0 percent registered in the preceding first quarter.
But what does all this mean to the rakyat? How will this affect the rakyat? Should we be worried?
For starters, yes we have to acknowledge that times are challenging and the country’s economy is slower than what it was before.
Yes, its true that our gross domestic product is slower, productivity has slowed and income have weakened.
But overall, we are still okay as the average Malaysians still have their jobs, they still earn their salaries, they still have a roof over their heads, they still have money in their pockets to buy petrol for their cars and their motorcycles or take the bus and above all have income to put food on the table for their families.
We are still able to go shopping with our families, enjoy holidays in the country and some can still travel overseas.
But the most important thing to say here is that, eventhough gross dometic product growth is lower, Malaysia still registered growth – repeat – Malaysia still registered growth.
Professor of Economics at Sunway University Business School, Dr Yeah Kim Leng told the New Straits Times on August 24 said it is true that income generated is lower, the rakyat’s economic activities has moderated and the situation is getting tougher and tougher every day.
“But what is important is that Malaysia’s economy is still resilient, the country’s economic growth eventhough a bit slower is still healthy and the unemploment rate is still low.”
That is very true as some of our big companies such as Maybank, RHB, Petronas despite announcing lower net profit are still standing strong and have not laid off workers in a big way.
So despite the lower economic growth, Malaysia is still strong given the challenging economic situation and the rakyat by and large are still okay.
Dr Yeah said Malaysia so far has not experienced a sharp economic slowdown and income growth albeit softer is still positive, and there has been no widespread VSS (voluntary separation scheme, retrenchment or laying off workers).
The rakyat however must continue to play their role by spending a lot more as the domestic economy can cushion the slowdown caused by the global economic slowdown.
So the rakyat must continue to spend more, go for outings at shopping malls with their families, go travel on holidays at domestic destinations and not just keep their money in the bank.
Employers meanwhile can reduce their Employees Contribution Fund contribution to 8 per cent from 11 per cent, so that the rakyat will have more disposable income for their daily expenses.
Remember, we are better off compared to Thailand, Japan and Singapore which relies heavily on exports and are experiencing slower or sometimes negative growth.
Japan’s exports had its worst yearly decline in July by 14 per cent year on year, the lowest since October 2009.
Despite the global economic uncertainty, Malaysia’s economy has defied the odds and is still going strong and we Malaysians are generally still okay.
This is due to our solid economic fundamentals, sound financial management and prudent economic planning which has enabled Malaysia to be at the forefront or at par with other strong economies in the region such as Japan, Indonesia and Thailand to name a few.
MIDF Research in fact said that Malaysia is slightly behind the Philippines which registered a growth of 7 percent in the second quarter of 2016, which is among the fastest in Asia.
Malaysia is even better off than Japan which saw its trade activity diving deeper in July.
Meanwhile, Prime Minister Datuk Seri Najib Razak said Malaysia’s growth is still healthy and far above the global average.
Citing credit ratings agency, FitchRatings, which has maintained the country’s ‘A-‘ rating with stable outlook, the prime minister said it is a reflection of the country’s strong economic fundamentals,” he said at the Khazanah 10th Year Anniversary Dinner here on August 19.
So the Malaysian economy is still going strong and is expected to sustain and remain resilient against the economic headwinds for many years to come and the rakyat in general are still okay.
Syed Akram Syed Hussein is an independent political and economic analyst and Malaysian Access reader. Article written is strictly his personal view. Malaysian Access does not necessarily endorse the opinions given by any third party content provider.