Effects of inflation on the malaysian economy economics essay

With the weakening of the ringgit, the prices of goods and services are expected to increase further. Owing to inflation, several monetary as well as fiscal policies are impacted.

The search for top educators and faculty staffs again will lead to an explosion in salaries. They also agreed to upgrade economic and financial co-operation, especially in the production of halal food, water processing and railway construction.

In the event, when the rate of inflation is high, the interest rates also rise. We can only quietly wait and see whether our country leader is more concerned on advancing his political agenda or to focus on alleviating the financial burden we carry.

The returns a company offer, on investment fully depend on the performance of the company. There are many reasons that contributed to this, among them are the following. Singaporeans who enjoy a quick getaway to Malaysia would likely be the prime benefiters as ringgit falls to an all-time new low trading around 2.

Exports growth A weak ringgit can act as a stimulus to the Malaysian businesses as it has now become more affordable for foreign markets to purchase Malaysian-made goods. A major issue is that a decrease in wage rates may well cause an even worse effect in the long run.

Logistic firms fall under this 5. The increment of demand for the domestic products will likely generate more profits for the certain businesses such as the manufacturing sector.

Economy of Malaysia

Inflation and economic growth are affected by exchange rates as well. This is associated with the slowing down of economic activities. This may push a country into recession if it continues over two or more successive years.

In the business world, firms are fiercely fighting with one another to survive. Increased price of goods and services If you have mixed feelings about Goods and Service Tax GST imposed on the things you love, a weak ringgit will worsen your buying mood.

This is totally misguided for a number of reasons: How to Write a Summary of an Article?

Inflation in Malaysia

If a sceptical and nervous populace is to be reassured, Najib and the government will have to offer credible and transparent solutions to steer the country through its looming economic challenges.

Take a simpler example: On the other hand, the possible long term effects of a fall in wages may well be detrimental to an economy. Increase in the rate of crime.

This causes reduced investor and household confidence hence they hold back on spending or any investment. If wages fall then fixed costs per unit will also fall. In terms of DPI, appropriately applying decreased interest rates monetary policy or increased taxes fiscal policy are just one of several ways of counteracting a rise in inflationary pressure.

Inflation Essay

In future it will be much easier or possible for Malaysian government to borrow more money for development projects. The Ringgit became non-internationalised and a traveller had to declare to the central bank if taking out more than RM10, out of the country and the Ringgit itself was pegged at RM3.

Such move is also politically unpopular.Baseduponthegraphsabove,theoverallincomeinequalityhasdeclinedthen killarney10mile.comtherhand,theabsolutepoverty. Inflation can arise from internal and external events; Some inflationary pressures direct from the domestic economy, for example the decisions of utility businesses providing electricity or gas or water on their tariffs for the year ahead, or the pricing strategies of the food retailers based on the strength of demand and competitive pressure in their markets.

Malaysia Inflation Forecast FocusEconomics Consensus Forecast panelists expect inflation to average % indown percentage points from the previous month’s projection. This downward revision reflects the new government’s decision to reduce the Goods and Services Tax (GST) to 0% effective 1 June.

That is evidenced by the Malaysian ringgit’s dismal performance, falling to over RM4 to the US dollar for the first time since the Asian financial crisis. The currency has been on a downward slide the past year despite the government’s efforts to prop it up by spending its foreign reserves.

The aim on this study is to develop a research to test is there any effect that the inflation brings to the Malaysia economic growth. General Objective.

C015177 | Malaysia’s Economic Challenges: Implications of Ringgit’s Fall

Our general objective of this study is to determine the relationship between Malaysia’s inflation rate and its economic growth. Inflation Essay. August 20th, the possible long term effects of a fall in wages may well be detrimental to an economy.

A solution provided for CPI is that an advance in technology may allow for an increase in wages without an increase in inflation, overall costs of production and a fall in competitiveness. free inflation essay.

Effects of inflation on the malaysian economy economics essay
Rated 5/5 based on 65 review