The Prime Minister announced that Malaysia economy is out of recession, that 4Q 2009 registered a 4.5% increase in GDP.
What does this means to the ordinary Malaysian?
The main street is still suffering from haunted inflation coming with pending increare in pump prices, electricity tariff, and threats from privatized water company to force the Selangor state government to approve its revised tariff or to pay RM300million compensation.
In short, the ordinary people still struggle to earn enough for their basic needs even before the pending increase in prices and tariff.
When refer to the latest Consumer Price Index, CPI for Dec 2009 is 0.2%, while unemployment is posted as 3.6%.
Based on the statistics, Malaysia is really doing good.
But, do you feel it?
The 4Q 2009 GDP growth may be attributed to greater export demand, especially to US, since US records 4% increase for the same quarter.
Can this sustain? I do not know. The US better than expected growth was, to many economists, is due to government stimulus package, bailout of big banks and automotive industry, and partly due to replenishment of inventory for the holiday season.
If this is true, we may see a softer growth or worse, a U-turn for US GDP for 1Q 2010 since situation does not realy improve based on ordinary economic activities but intervention of authority in the form of stimulus and bailout, and chronically motivated growth in 4Q 2009, ie holidays.
How will this impact Malaysia? US is the single largest buyer for our export goods, and Malaysia economy is export oriented. If US goes south, we will sink together, lesser export means lesser production means fewer job opportunity.
Even if US are on track as President Obama claimed for its recovery, and Malaysia tags on US economy and achieved 5% growth for 2010, the ordinary Malaysian will still face a great challenge right in-front of them: INFLATION.
Thus, the GDP growth may be offset by greater increase in cost of living. This is enough to put almost all lower and middle income group in a state where keeping themselves going is too big a task to swallow.
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