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Recession Malaysia to be a reality in 2023?

Investment

Recession Malaysia to be a reality in 2023?

What is a recession?

This is the definition for recession. A recession is a significant, pervasive, and persistent decline in economic activity. (Investopedia) Briefly, it meant that people spend less than last year. Imagine getting the same salary this year as last year. However, because of sentiment, you decided to spend less and save the money into the savings account instead. Now imagine another 100,000 people who has the same thoughts all doing the same. Suddenly, the number of people spending in malls are reduced.

Due to this, some of the retailers in the malls could not earn enough money and has to close the shop and retrench the people. These people who got retrenched would then have even lesser money to spend. This cycle will continue unless of course more people have jobs and they start to spend more money again.

At the moment, people are still spending a lot contributing to inflation

When people are spending too much, investing too much, it will push up prices; inflation. For example, when demand increases, supply will take time to catch up. This is why many central banks are increasing the interest rate so that people would be tempted to put their money in banks instead of spending it. By the way, if things are this easy, then everything could be easily controlled. Now, there are people saying that increasing interest rates too fast may just be the cause of recession next year. Oops…

What are some of the latest recession news then?

Stock markets have been volatile but it did rally a bit lately. Well, it seems that this rally may soon have to face the recession reality. Do read about what experts have to say. Experts means those who are in the industry and have access to a lot of data to make the statements. Article in cnbc.com The global stock market rally could be about to meet recession reality.

Meanwhile, the U.S. economy (largest in the world) may be able to escape recession in 2023. This is what Morgan Stanley says about the U.S. economy. Article in wionews.com

Europe is not in such a great shape yeah. IMF says that Europe has to do more. It is being plagued by a Toxic Mix of High Inflation and Flagging Growth. Article in imf.org

Closer to home, Deutsche Bank is predicting a recession for Australia in 2023. Here’s that article: news.com.au – Grim prediction by investment bank

Singapore will still be growing and will not be suffering from any recession for 2023. This is what the Monetary Authority of Singapore is predicting. Article in cnbc.com

Hey, will Malaysia be in a recession then?

Our Bank Negara Malaysia says Malaysia will not be in a recession. However, many Malaysians (not including me) prefer to listen to some external sources, so let’s read and quote some of them here.

IMF predicts Malaysia will grow by 4.4% in 2023. Article in nst.com.my here.

World Bank says Malaysia will grow its GDP by 4.2% in 2023. Article in thesundaily.my

Fitch Solutions says that Malaysia will grow its GDP by 4% for 2023. Article in theedgemarkets.com

S&P Global says that the loans growth for banks in Malaysia will be 5-6% in 2023. (By the way, this also meant they are not thinking about recession for Malaysia.) Article in nst.com.my here.

Happy believing what you want to believe. Just remember to take appropriate actions to protect your investments or be ready for investments.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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