DID you know that you now have the opportunity to have more money in your pockets?
All you have to do now is to apply for loans at banks as the interest rates are cheaper now following Bank Negara Malaysia’s move to cut interest rates last week.
Following the cut, there will be more money in your pocket as the loans are cheaper and Malaysians will have more disposable income.
With the slashing of interest rates, Malaysians and businesses will have access to cheaper housing, car, credit card, education and personal loans.
When the loan is cheap, there will be more money in the rakyat’s pocket and this will lead to more spending activities.
With more disposable income, the rakyat will be able to shop more at shopping complexes, eat more frequent at their favourite restaurants, buy new cars and go cuti cuti Malaysia (go on holidays at domestic destinations).
Parents can go out more often with their children and spend quality time with them and spend on ice cream, pizzas and pastas.
University students can buy new phones, hang out with their friends more at fast food outlets or mamak restaurants and watch the English Premiere League while buying more and more drinks and food until the wee hours of the morning.
All these are domestic spending activities which will support our economy and position it on a constant growth trajectory.
It is important that the rakyat continue to spend when the economy is weak because domestic spending will shield the country from the uncertain global economy.
If the rakyat does not spend, the economy will collapse just like what happened to Greece where the economy was bad and its people made it worse when they withdrew all their money from the banks and kept it at home and not spend it.
The goods news is that not only the people on the ground will have access to funding, Malaysian businesses and small and medium scale enterprises can also have access to funding.
Malaysian businesses are important as the SMEs are the backbone of our economy contributing 80 percent to the gross domestic product and with access to funding, the SMEs will be able to upgrade and buy new machinery which will all lead to higher productivity which in the end will spur the economy.
However, with all these loans being distributed, Malaysians must be careful not to overspend and must ensure that they are able to service their loans.
The inability to pay back loans will lead to a high household debt and rising inflation and this by itself will be a problem to the national economy.
In conclusion, it is important that in both good and bad times, the rakyat must keep on spending their money and not keep it in banks.
This is because by spending, the country’s economy will keep on moving. Once the rakyat stops spending, the economy will sink like a capsized boat. And lowering the interest rates can stop that from happening.
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.