5 The Issues of the Economy

Assalamualaikum (^_^)

Today, we will discuss about the issues of the economy nowadays.

1. The increase in the cost of living

The government raised the price of petroleum (an increase of 20 per cent), electricity (up 15%), sugar (up 30 sen), the price of flour (up 20 sen) and toll rates (minimum 50 per cent) or less will boost the cost of living all people. The latest official inflation rose to 3.4%, the highest in a year. The unofficial inflation / real may triple over 10% per annum.

The average price of a cup of coffee now is RM1.60, RM1.80 price of rice is rolled while a piece of bread has reached RM1.20 excluding GST.

2. The high level of government debt

Government debt levels have increased since 1970. Due to the federal government in 1970, only RM2 billion, in 1999 amounted to RM95 billion but now has reached RM568.2 billion or 53% of GDP is approaching the ceiling of 55%. Foreigners also owns approximately 15% of total debt in the country. This condition can affect the exchange rate of the country.

For the record, the government spent more than RM10 billion a year just to pay interest on debts that have been taken by the Federal Government.

3. The household debt level that harms people

Malaysian household debt doubled to RM750 billion or 76.2% of GDP in July this year. Large fraction is 29% housing loans, vehicle loans, 51%, 15%, personal loans and student loans by 33%.

This means that Malaysians are generally made with wasteful spending and reckless.

If not controlled, five years household debt in Malaysia exceed 100% of GDP means that the country earned income is insufficient to pay the outstanding debt.

4. decades of economic growth slower

The total economy (GDP) in 2014 was RM1.07 trillion. Although the global economy is expected to increase, Malaysia's GDP growth average of the last ten years, only slower by 5% and more driven by domestic demand. Compared to an average GDP growth of 7% in 1990, driven by exports and external sector.

For the record, since 1945 to 1998, Malaysia is one of 13 countries which achieved growth of over 7% for more than 53 years. However, after 1998, economic growth has fallen gradually.

5. The cost of higher government management

From 1970 to 2013, total administrative expenses increased from RM2.2 billion to RM216.2 billion. The largest component is the salary of civil servants.

To note, Malaysia has the highest ratio of civil servants in the world 1.4 million or 10% of the total workforce in Malaysia.