GDP and inflation to grow in 2014
Author Avatar

 

The Asian Development Bank (ADB) has predicted a good year for Malaysia and most of Southeast Asia in terms of the economy in 2014. Despite Fitch Ratings hitting negative, the ADB says Malaysia’s Gross Domestic Product will grow by 5%  whilst the region will see an average 5.3% increase next year.

“The pace of growth is expected to quicken in 2014 on the back of improved economic performances in the US and Europe and a gradual acceleration in global trade, but partly offset by the dampening impact fiscal consolidation will have on domestic demand,” the bank said in a report released earlier this week.”

But before you don your sunnies and head to the tropics to celebrate, you might want to think about a decent lifestyle cut-back first. The ADB also predicts that inflation in the country will increase by 2.2% in 2014. The rise is linked to the recent fuel subsidy cuts and other subsidy reductions which are expected to be revealed in the Budget 2014.
Domestic Trade and Consumer Affairs Minister, Datuk Hasan Malek had this to say about the possible reductions.

“The government’s intention is to strengthen the economy. We do not want to be like the United States, where its economy has been shut down,” he was quoted as saying by the newspaper.

“Sometimes certain actions need to be carried out. For me, the country’s interest is paramount.”

Whilst the rationalisation is aimed at reducing the government’s liability and thus strengthening the country’s economic footing, this means a lot more pressure on everyday folk struggling to just get by. In the country, wages are still stagnating, for many, basic costs of living prevent them from making ends meet. This will create a new problem where domestic demand overall for goods and services decrease with rippling effects throughout the economy.

PAS research centre director, Dzulkefly Ahmad argues that goods and services taxes (GST) is not suitable for Malaysia because its economy is driven by domestic demands.

If GST is implemented, the former Member of Parliament said Malaysians’ spending power would decrease with rising inflation, thus affecting the country’s economy and revenue stream.

 

It looks like the tropical holiday for most of Klang Valley-ites may be resigned to an RM3 (price increase!) can of Coke at Taman Jaya. Sorry, you may not be able to afford those Petaling Street sunglasses either.

 

0 0 votes
Article Rating

SHARE

Comments (0)

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments
Top Personal Finance News Articles
Top Personal Finance News Articles
Post Image
Petrol Price Malaysia Live Updates (RON95, RON97 & Diesel)
The RinggitPlus Team
- 26th January 2022
We provide weekly updates on every Friday at 5pm on the prices of RON95, RON97 and Diesel in Malaysia and a chart that shows the movement of fuel prices across a 6-week period. Bookmark this page now!
Post Image
Shopee Introduces SPayLater, Lets Users Buy Items Now And Pay Later
Alex Cheong Pui Yin
- 18th January 2021
Shopee has introduced a new payment feature that lets its Malaysian users purchase items and pay for them […]
Post Image
Best High Interest Savings Accounts In Malaysia (October 2021)
Pang Tun Yau
- 6th October 2021
Make your money work for you by depositing them into the best high-interest savings accounts in Malaysia!
Post Image
Historical EPF Dividend Rates
The RinggitPlus Team
- 3rd March 2021
Ever wondered how this year's EPF dividend rate compares to previous years? We got you covered with our historical 11-year chart!

Related articles

Related Posts Image
Related Posts Image
Related Posts Image
Related Posts Image