Malaysians are always quick to blame the government whenever the economy slows down.
When the ringgit weakens, the people also criticise the government for its poor handling of the economy.
Due to the challenging times, most Malaysian companies are also registering losses or lower profits due to the difficult business environment.
These companies spans across many sectors which include automotive, property, retail, banking, plantation firms and others.
But let us be reminded that the economic slowdown is not confined to Malaysia alone.
It is a global weakening stretching all the way to the US and also partly caused by a buckling China economy and post effects of Britain pulling out of the European Union or Brexit.
The slowdown is widespread across the region happening not only in Malaysia but also in Singapore, Thailand, Indonesia and other countries in the area.
As an example, Singapore’s government-owned investment arm Temasek probably declined for the first time in seven years as stock markets plunged amid a slowing Chinese economy and uncertainty over U.S. Federal Reserve policy.
Bloomberg reported last month that the value of the Singapore state investment firm’s holdings decreased by 13 percent to S$231 billion in its fiscal year ended March 31, according to an estimate by CIMB Private Banking.
That would be the first decline for Temasek since the 12 months ended March 2009.
Another example, The Guardian reported that the UK faces ‘mild recession’ this year as its economy shrinks at its fastest rate since 2009 due to the effects of Brexit and the Financial Post reported that Canada’s economy is growing at the slowest pace in 60 years and the only thing holding us up is its housing sector.
So it is not fair to lambast the government for inefficiency as it is doing its best to cushion the impact which include instructing Bank Negara Malaysia to lower the overnight policy rates which will lead to cheaper loans as it will slap lower interests.
This will lead to more loans being distributed to the people and they will spend more which in turn will support the domestic economy.
And bear in mind, eventhough the ringgit has fallen in value, it is still the strongest among its peers in the region.
But let us not forget that despite the tough times, some sectors are doing well such as manufacturers, rubber glove makers and exporters and they are laughing all the way to the bank due to the weak ringgit.
Tourism will also do well because due to the cheaper ringgit, more tourists will be attracted to come to Malaysia and they will spend more to go shopping as well as go for a sightseeing trips all over the country.
Despite the worrying times, Malaysia remains steadfast to repel the threats as foreign direct investment (FDI) flows into the Asean region which include Vietnam, the Philippines and Malaysia have been resilient.
Credit Suisse described Malaysia as “surprisingly resilient” and Vietnam and the Philippines as “winners”.
It, however, cautioned that in the case of Malaysia, there must be some reform momentum to maintain the robust FDI.
Standard & Poor’s said last month it does not see any downgrade risks to Malaysia’s sovereign rating for the next one to two years due to its credit metrics.
In July, the World Bank said Malaysia’s economy has remained resilient to external headwinds and expects the country’s gross domestic product to grow at 4.4 per cent this year and 4.5 per cent next year.
This should be welcoming news for Malaysians and we should set aside our differences and work together to ensure our economic growth remains on track.