Actually, it has been widely expected by majority of all analysts that Bank Negara Malaysia (BNM) would continue to pursue an accommodative stance for the economy. This is to push the local economy upwards amidst current slowdown. This is despite Ringgit’s weakening and volatility due to many uncertainties such as negative sentiment from GST implementation or even the fact that many are buying US$ because of the potential of the US Federal Reserve raising interest rates in the near future. Maybe not so soon though. Read here: Buffett’s advice and Federal Reserve’s decision.
BNM expects investment activity in the export-oriented industries, the services sector and for infrastructure projects. This would of course cushion the impact of the lower oil and gas-related investment activities. The economic outlook is however seen to be improving as latest data showed exports no longer trending downwards with the recovery of some key export markets. In fact, BNM said that the global economy will improve even if at a moderate pace. It expects the domestic consumption to be a key driver of growth even after factoring the GST’s sentiment.
My personal feeling remain the same. GST is just a short blip. Looking at how many people who is talking to me about property, I think it is just time and it should be soon too. Those earning much higher salaries have also more disposable income every month because the income tax rate has been reduced up to 2%. Lower fuel prices compared to last year meant that every car driver have more to spend on a monthly basis as well. Yes, I know, everyone is saying that with the Ringgit nearing the 1998 level, how can I be so optimistic? I am optimistic because everyone is pessimistic. Please always note that when everyone is hot, we should be very cautious. My views remain. Happy thinking and reading.
written on 8 May 2015
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