KUCHING: Though the World Bank has warned that the global recession might reach its peak next year, Malaysia might not entirely be affected by it.
Economics lecturer from Malaysia Sarawak University (UNIMAS) Dr Evan Lau felt that the statistics for the gross domestics product (GDP) released by Bank Negara Malaysia (BNM) on the second quarter of 2022 says otherwise.
“The number says otherwise, so technically from the inside perspective we are doing just fine,” he said.
Bank Negara Malaysia reported that the GDP has expanded by 8.9 per cent in the second quarter of 2022 amid the improvement of the domestic demand due to more of the restrictions of movement control order (MCO) has been lifted.
He then also however stated that from the outside perspective, as reported by the World Bank, it seems like not a very good signs for 2023.
“I believe the policymakers do attempt as best as they can to curb this issues, such as increase the overnight policy rate (OPR).
“And with the upcoming Budget 2023, I expect more methods to combat and to overcome it from the outside perspective,” he added when interviewed by reporters over a phone call session.
When asked on whether the recent fallen Ringgit Malaysia (RM) currency compared to United States Dollar (USD) is a sign of the incoming recession for the country, he said that the country’s currency only happened towards the USD currency.
“Compare to other regions, especially in our region except USA, that’s a whole different story.
“Like I said the numbers suggest otherwise, external pressure is another different issue which actually we can’t say much on that part, that is external pressure,” he stressed.
At the same time, he also added that it is a good thing that World Bank gave an early warning so that people could also prepare if the recession ever going to hit the country.
In the meantime, another Economics lecturer from UNIMAS Dr Mohamad Jais stated that not only will Malaysia be affected by the recession if it does happen in 2023, but also the BNM has no choice but to increase the interest rate even more, thus put pressure over the people who are less capable, to pay more.
“Of course Sarawak would be affected as well because this is a global issue.
“Even though we export quite number of products, we also import tons of product. So I believe the import cost would be higher due to the fall of our currency as well,” he said.
When asked again on any advice that could be given to the people at the moment, both of them agreed on one thing, which is to prepare for the rainy days.
“What is important here is that you have prioritise what we need and what we want. It goes back to do you need this or do you want this?
“So if the budget itself is being tightened up, because of perhaps impacted the loan individually, little bit more. Not to reduce the consumption, prioritise what to be consume, what to be buy and what not to be buy for now.
“Perhaps can save much more for the future, like the saying ‘save for the rainy days’ we don’t know when it’s going to rain, but we prepare our umbrella whenever we go,” he said.
Mohamad Jais also shared the same views, in which people should watch their own spending, expenditure.
“Control and do go for unnecessary things.
“Because we don’t know what would happen, if the inflation increases by one per cent, then there goes our savings. Cut short things that we don’t need,” he said.
