Economic News

[snowbird]

Following are the highlights of the 2016 Bank Negara Malaysia Annual Report:

Malaysian economy projected to register a sustained growth of between 4.3 percent and 4.8 percent in 2017.
*
Bank Negara Malaysia declares dividend payout of RM2.5 billion to the government in 2016.
*
The current account is expected to register a surplus of between 1.0 and -2.0 per cent of Gross National Income in 2017.
*
Inflation is projected to average higher in the range of 3.0 percent and 4.0 percent in 2017.
*
Gross exports expected to increase by 5.5 percent in 2017 versus 1.1 percent in 2016.
*
Gross imports anticipated to rise 6.4 percent compared with 1.9 percent last year.
*
Malaysia's exports and imports poised to strengthen in 2017, underpinned by projected improvements in global growth, commodity prices and sustained domestic demand.
*
Trade balance will remain in surplus in 2017.
*
Ringgit depreciated by 4.3 percent to end at RM4.486 against the US dollar in 2016.
*
Bank Negara Malaysia's total assets stood at RM451.0 billion, with international reserves amounting to RM423.9 billion (US$94.5 billion).
*
International reserves remain ample to facilitate international transactions and sufficient to finance 8.5 months of retained imports and is 1.1 times the short-term external debt.
*
Malaysia's external debt stood at RM908.7 billion, equivalent to US$200.6 billion or 73.9 percent of GDP, at end-2016 (2015: RM833.8 billion).
*
The unemployment rate rose to 3.5 percent in 2016 from 3.1 percent a year ago, due to slower job creation amid more moderate economic growth.
*
The services sector recorded a higher growth of 5.6 percent in 2016 from 5.1 percent in 2015, backed by expansion across all sub-sectors.

https://www.malaysiakini.com/news/376792#ixzz4c94zZ4Ni

High Inflation Rate.
Currency depreciating.
Shrinking National Reserves.
High External Debts
Growing Unemployment.

Unless things really improve greatly this year, otherwise all the basic ingredients for a perfect storm has all lined up.

 

[FHBH12]

Malaysia Feb inflation rate at 4.5% y/y, highest in 8 years

Friday, Mar 24, 2017

Malaysia's consumer price index in February rose to an eight-year high at 4.5 per cent from a year earlier, government data showed on Friday.

The inflation rate is the highest since November 2008 when it hit 5.7 per cent.

February's inflation rate was driven by highest costs of transport and food, data from the Statistics Department showed.

The pace of inflation was above the 4.1 percent growth forecast in a Reuters poll, and exceeds Malaysia's average inflation target for the year. Annual inflation rose 3.2 per cent in January.

Malaysia's central bank said on Thursday it expected inflation to average between 3 to 4 per cent for 2017.

- See more at: http://news.asiaone.com/news/malays...te-45-yy-highest-8-years#sthash.EN5UBPzV.dpuf

 

[rotikok]

Following are the highlights of the 2016 Bank Negara Malaysia Annual Report:

Malaysian economy projected to register a sustained growth of between 4.3 percent and 4.8 percent in 2017.
*
Bank Negara Malaysia declares dividend payout of RM2.5 billion to the government in 2016.
*
The current account is expected to register a surplus of between 1.0 and -2.0 per cent of Gross National Income in 2017.
*
Inflation is projected to average higher in the range of 3.0 percent and 4.0 percent in 2017.
*
Gross exports expected to increase by 5.5 percent in 2017 versus 1.1 percent in 2016.
*
Gross imports anticipated to rise 6.4 percent compared with 1.9 percent last year.
*
Malaysia's exports and imports poised to strengthen in 2017, underpinned by projected improvements in global growth, commodity prices and sustained domestic demand.
*
Trade balance will remain in surplus in 2017.
*
Ringgit depreciated by 4.3 percent to end at RM4.486 against the US dollar in 2016.
*
Bank Negara Malaysia's total assets stood at RM451.0 billion, with international reserves amounting to RM423.9 billion (US$94.5 billion).
*
International reserves remain ample to facilitate international transactions and sufficient to finance 8.5 months of retained imports and is 1.1 times the short-term external debt.
*
Malaysia's external debt stood at RM908.7 billion, equivalent to US$200.6 billion or 73.9 percent of GDP, at end-2016 (2015: RM833.8 billion).
*
The unemployment rate rose to 3.5 percent in 2016 from 3.1 percent a year ago, due to slower job creation amid more moderate economic growth.
*
The services sector recorded a higher growth of 5.6 percent in 2016 from 5.1 percent in 2015, backed by expansion across all sub-sectors.

https://www.malaysiakini.com/news/376792#ixzz4c94zZ4Ni

High Inflation Rate.
Currency depreciating.
Shrinking National Reserves.
High External Debts
Growing Unemployment.

Unless things really improve greatly this year, otherwise all the basic ingredients for a perfect storm has all lined up.

I dont find anything particularly dangerous for a storm to arise by just reading those data. Im surprise by your special ability.

High Inflation Rate. (What in particular causing the hike? Fuel? Higher than norm, and what you need to focus is, what bank negara will do to fight against it and the subsequent impact)
Currency depreciating.(this we all know, malaysian buying power are affected and singaporean like to come and spend money here)
Shrinking National Reserves.(to the point of a crisis? Enough to tahan major impact?)
High External Debts (still 75% of external debt denominated in ringgit)
Growing Unemployment. (Err...so? Have you compare what is the norm globally? Anyway, sg citizen unemployment rate last 4th quarter also 3.5%, but really doesnt tell much nor any bad thing will come out by just reading the data.)

Dont just focus on malaysia and come out with bad feeling, last time i also focus on just US economy data and all sort of bad feeling cpming out...the US data back then, even worse than malaysia, see also you will sweat.

Those thing hor, just like 70 down to 65 in a exam, still pass la. Dont try to draw a line and say next time will be 40. 65 can up or down, but will vry hard to fail (a crisis).

 

[snowbird]

I dont find anything particularly dangerous for a storm to arise by just reading those data. Im surprise by your special ability.

High Inflation Rate. (What in particular causing the hike? Fuel? Higher than norm, and what you need to focus is, what bank negara will do to fight against it and the subsequent impact)

High Inflation Rate if not coupled with high growth rate and high salary increment simply means big trouble, people are not having enough to spend!
And if inflation is not controlled and keep getting higher, bigger trouble ahead and what are the remedy policies you can see that will address this?

Currency depreciating.(this we all know, malaysian buying power are affected and singaporean like to come and spend money here)
Good for tourists yes, but we are talking about the lives of the locals!!

Shrinking National Reserves.(to the point of a crisis? Enough to tahan major impact?)
The National Reserves was about US140 billions in 2012 and now it is US$94.8, shrinking every year!
Good Sign? No need to worry?
So where did all the money go?

High External Debts (still 75% of external debt denominated in ringgit)
Growing Unemployment. (Err...so? Have you compare what is the norm globally? Anyway, sg citizen unemployment rate last 4th quarter also 3.5%, but really doesnt tell much nor any bad thing will come out by just reading the data.)

The big problem is most U grads who seek civil jobs and civil service is not employing enough year after year.
This was followed by retrenchment in Petronas, MAS, various universities, etc, etc.

Dont just focus on malaysia and come out with bad feeling, last time i also focus on just US economy data and all sort of bad feeling cpming out...the US data back then, even worse than malaysia, see also you will sweat.

We are discussing about MY, so no need to talk about US's economy here, maybe then you might as well say something how Greece went bankrupt.

Those thing hor, just like 70 down to 65 in a exam, still pass la. Dont try to draw a line and say next time will be 40. 65 can up or down, but will vry hard to fail (a crisis).

The Bank Negara report showed what happened last year.
I said that if things don't get better, the whole economy will be adversely affected which also means if things do get better, it'll be fine!
So, if you think the Bank Negara report is a very positive report, then which part is positive?
And by the way, do you know how Greece went bankrupt?

 

[snowbird]

Geely pulls out of buying Malaysia’s Proton

China’s Geely Automobile Holdings has withdrawn its bid to acquire a controlling stake in Malaysian automaker Proton, Geely’s president, An Conghui has told the South China Morning Post.

Proton was looking for a strategic partner to assist with research and development as part of conditions it agreed to receive a loan of 1.5 billion ringgit ($384.9 million) from the Malaysian government last year.
So, not partner with money, no loan from govt.?
So, Proton have to now quickly find one or else will have to close shop and thousands will be jobless, big issue!!!!

http://www.scmp.com/business/china-business/article/2081190/geely-withdraws-proton-bid

 

[rotikok]

The National Reserves was about US140 billions in 2012 and now it is US$94.8, shrinking every year!
Good Sign? No need to worry? So where did all the money go?
Quite stable after 2015 ~less than 100 B USD, i think they foolishly spending too much reserve in 2014 to buy back ringgit at relatively high ringgit value and with low impact after the purchase. Err... need to worry? Want to make up another story linking this with 1MDB again?

High Inflation Rate if not coupled with high growth rate and high salary increment simply means big trouble, people are not having enough to spend!
And if inflation is not controlled and keep getting higher, bigger trouble ahead and what are the remedy policies you can see that will address this?
Well, ok you are talking about single year result. And you already drawing a line by saying getting higher and higher. Extremely normal to see such within the range inflation rate la, malaysia 2016 growth rate for last year is ~5% right? Remedy....sound like you doesnt quite understand how central bank rein inflation, arent you?


The big problem is most U grads who seek civil jobs and civil service is not employing enough year after year.
This was followed by retrenchment in Petronas, MAS, various universities, etc, etc.
Well, despite all these, unemployment rate still surprisingly low, dont you agree?

We are discussing about MY, so no need to talk about US's economy here, maybe then you might as well say something how Greece went bankrupt.
My point is, if you know and understanding more, you will not bother by such data...or better, able to come out with data and express more meaningful concern that forummers here think it will be valuable information input.
The Bank Negara report showed what happened last year.
I said that if things don't get better, the whole economy will be adversely affected which also means if things do get better, it'll be fine!
So, if you think the Bank Negara report is a very positive report, then which part is positive?
And by the way, do you know how Greece went bankrupt?

Great you asked about Greece, I think last time you asked before but later i too lazy to reply and later forget. Greece is trap inside a monetary system that they do not have sovereignty rights, so they cannot inflate their debt out like other countries do, nor willing to risk bigger subsequent impact by leaving EU. So they stuck in EU, and debt that they pile on, will have to be defaulted and EU central bank to help them. Agree with my explanation? Or you have better way of explaining it? Willing to listen your opinion.
I dont think last year report is positive, I already describe, is like 70 down to 65 result, will 65 result causing bigger trouble? Nope, next year can be 63 or 75, but whatever number it is, fail (let say 50) is hard to achieve.

I dont think those data able to tell whether 50 is likely next year. Better way to tell us 50 is likely, is not those data, rather maybe macroeconomic concern or malaysia economy and finance structurally got problem. Then I may change my view.

 

[snowbird]

Great you asked about Greece, I think last time you asked before but later i too lazy to reply and later forget. Greece is trap inside a monetary system that they do not have sovereignty rights, so they cannot inflate their debt out like other countries do, nor willing to risk bigger subsequent impact by leaving EU. So they stuck in EU, and debt that they pile on, will have to be defaulted and EU central bank to help them. Agree with my explanation? Or you have better way of explaining it? Willing to listen your opinion.
I dont think last year report is positive, I already describe, is like 70 down to 65 result, will 65 result causing bigger trouble? Nope, next year can be 63 or 75, but whatever number it is, fail (let say 50) is hard to achieve.

I dont think those data able to tell whether 50 is likely next year. Better way to tell us 50 is likely, is not those data, rather maybe macroeconomic concern or malaysia economy and finance structurally got problem. Then I may change my view.

So, you want to compare with examination results.
So, if this year the marks is 60/100 and no show of improvement, it may slip to 50/100, just pass.
And if still no improvement is made, sure fail!
So, the national reserves fell from 140 to 94 billion in just a short time and if fall some more, also sure fail la........unless next year can go above 98 billion?
Next year no more budget deficit?


And talking about Greece, there are really some very interesting points which are looking very similar.
Greece Crisis is totally SELF INFLICTED!
Due to heavy irresponsible borrowing and irresponsible spending for years of living beyond its means that resulted in a catastrophic debt that the country is unable to repay, and worse, potentially leading to financial crises in the countries that loaned money to them. (害人害己）。
Another problem was government after government, there's an increase in the country’s payroll thru a system that rewards supporters of the political parties with govt. jobs. This practice eventually led to an over bloated civil service, burdening the national budget. And now, if the govt. were to cut staff drastically, there will be high unemployment which will cause another set of problems.
Another issue was poor governance plus high tax evasion adds fuel to the crisis but it was only after the election of a new govt. that it was discovered that the financial books were cooked for years and the budget deficit was in reality actually very much higher.
So, the Greek Financial Crisis has very little to do with the monetary system and all the things you said. （自作自受，自己那来衰，怨不得别人）

 

[rotikok]

So, you want to compare with examination results.
So, if this year the marks is 60/100 and no show of improvement, it may slip to 50/100, just pass.
And if still no improvement is made, sure fail!
So, the national reserves fell from 140 to 94 billion in just a short time and if fall some more, also sure fail la........unless next year can go above 98 billion?
Next year no more budget deficit?


And talking about Greece, there are really some very interesting points which are looking very similar.
Greece Crisis is totally SELF INFLICTED!
Due to heavy irresponsible borrowing and irresponsible spending for years of living beyond its means that resulted in a catastrophic debt that the country is unable to repay, and worse, potentially leading to financial crises in the countries that loaned money to them. (害人害己）。
Another problem was government after government, there's an increase in the country’s payroll thru a system that rewards supporters of the political parties with govt. jobs. This practice eventually led to an over bloated civil service, burdening the national budget. And now, if the govt. were to cut staff drastically, there will be high unemployment which will cause another set of problems.
Another issue was poor governance plus high tax evasion adds fuel to the crisis but it was only after the election of a new govt. that it was discovered that the financial books were cooked for years and the budget deficit was in reality actually very much higher.
So, the Greek Financial Crisis has very little to do with the monetary system and all the things you said. （自作自受，自己那来衰，怨不得别人）

Err.... see, you drawing lines again. Simple answer to this is, have malaysia improved?
70 to 65, is like within normal range of fluctuation. Macroeconomically, malaysia doesnt have the basis to slip to fail.
As it is a normal range fluctuation, so scare until want to stimulus it, will risk overshooting the result to 85...and using exam result might not be accurate analogy bcoz 85 is a bad result either, overheating economy, and the impact is bad to the economy too.

Reserves chart, go see it, after malaysia gov stop buying back ringgit, the reserve is rather stable level at 90B+. What is your purpose of hoarding reserve, you need to ask yourself. It doesnt guarantee your economy is financially safe if black swan event occurs although it can behave as a absorber to suck in some of the impact. Any meaning if malaysia reserves reach 98B.... so what?
Budget deficit...so what? A high growth country, why bother with manageable budget deficit?

Seem like you like to pick one data and see a big problem. Economy is not surplus mean good, deficit means bad. You need to understand the context and subsequent impact to the real economy.

What you said, is all otherwards. Greece economy by right should have higher lending cost, they do not qualify to join EU but Goldmansachs helped them to get in. After get in, all EU nation enjoy one single rate, regardless of each individuals nation growth speed.

All you said is bad responsibility that is the caused....but have you ask, why they have bad responsibility? Blaming on human nature is your simple explanation.

After Greece joined, initial high lending rate before becoming EU members, instantly drop to low level. So Greece get into cheap capital that they never can dream of....and they borrow in euro, which they have no control of.

So the problem with the monetary system is, the rate is too low for Greece and open the pandora box for greece to borrow in a currency that they do not own. And what subsequently happen is all human nature.

Not blame on the monetary system? Let say Greece was rejected from EU, they will continue to own their own central bank. Greece due to bad governance and unfavourable financial market condition, will have much higher lending rate, issuing their own currency.

First, you would expect Greece willingness to borrow will decrease greatly, and due to high rate, more careful on their balance sheet. Simple example is, my lifestyle will be different if i got 15% pa loan vs 2% pa loan... 15%, i will scare everyday, calculating on everything while 2%....can i borrow more?

Secondly, ok let say high rate liao, gov still got high debt and unable to pay back....will they need to default and claim bankrupt? No need, printing machines is theirs. Last century still got country stupid enough not to use their printing press and claim bankrupt on their own currency. However, countries that gone bankrupt, normally are those debt that they do not own the printing press. Countries like latin america eg argentina gone bankrupt before...but it was US debt that they defaulted.

Have Greece not join EU, no matter how high their debt is, they will never gone bankrupt, provided their high debt is denominated in their own currency.

But they are in EU, and bankrupt is their only choice...they do not own the machines. But a big chunk of Greece debt, is actually being monetized by Super Mario (EU central bank head), so actually EU also open their printing press to help up. Central bank in Euro actually helping the bankrupt greece.

So stop blaming on human nature. If rule that set is like that, the way human nature behave will all be expected. Stop blaming Greece has worse human nature. If thing happen in Singapore, giving singaporean cheap credit, gov blur blur not doing anything, this thing can also be happen in singapore....but i would not blame of singaporean human nature, i will blame the system for giving singaporean cheap access to irresponsibility. Unlike you, i will put my finger on the monetary system rather than blaming on singaporean as the root cause.

 

[winners]

--- Deleted ----.

 

[Jetstream]

http://m.scmp.com/week-asia/geopolitics/article/2080869/why-are-chinese-moving-malaysia-thousands

So, Princess Cove and CGDB may not be ghost towns after all ...

 

[snowbird]

http://m.scmp.com/week-asia/geopolitics/article/2080869/why-are-chinese-moving-malaysia-thousands

So, Princess Cove and CGDB may not be ghost towns after all ...

Haha, this article actually explained the reason why 20,000 Mainland Chinese decided to buy into Forest City and another tens of thousands others into other development in JB, Penang and other cities.
But it didn't address on the problem now regarding the tightening of capital control that restrict Mainlanders to send money out of China to purchase properties!


Reacting to a weakening yuan and shrinking foreign exchange reserves, the government in January strengthened scrutiny of Chinese nationals seeking foreign currency.
As a result, anyone seeking to exchange yuan for foreign currency must first fill out an application form stating the purpose of the foreign money and when it will be spent.
The form also includes the warning: “Do not use it to purchase property overseas."
The government also limits the amount of foreign capital each Chinese national can obtain to up to $50,000 a year.


http://www.caixinglobal.com/2017-03-13/101065535.html

 

[snowbird]

Err.... see, you drawing lines again. Simple answer to this is, have malaysia improved?
70 to 65, is like within normal range of fluctuation. Macroeconomically, malaysia doesnt have the basis to slip to fail.
As it is a normal range fluctuation, so scare until want to stimulus it, will risk overshooting the result to 85...and using exam result might not be accurate analogy bcoz 85 is a bad result either, overheating economy, and the impact is bad to the economy too.

Reserves chart, go see it, after malaysia gov stop buying back ringgit, the reserve is rather stable level at 90B+. What is your purpose of hoarding reserve, you need to ask yourself. It doesnt guarantee your economy is financially safe if black swan event occurs although it can behave as a absorber to suck in some of the impact. Any meaning if malaysia reserves reach 98B.... so what?
Budget deficit...so what? A high growth country, why bother with manageable budget deficit?

Seem like you like to pick one data and see a big problem. Economy is not surplus mean good, deficit means bad. You need to understand the context and subsequent impact to the real economy.

What you said, is all otherwards. Greece economy by right should have higher lending cost, they do not qualify to join EU but Goldmansachs helped them to get in. After get in, all EU nation enjoy one single rate, regardless of each individuals nation growth speed.

All you said is bad responsibility that is the caused....but have you ask, why they have bad responsibility? Blaming on human nature is your simple explanation.

After Greece joined, initial high lending rate before becoming EU members, instantly drop to low level. So Greece get into cheap capital that they never can dream of....and they borrow in euro, which they have no control of.

So the problem with the monetary system is, the rate is too low for Greece and open the pandora box for greece to borrow in a currency that they do not own. And what subsequently happen is all human nature.

Not blame on the monetary system? Let say Greece was rejected from EU, they will continue to own their own central bank. Greece due to bad governance and unfavourable financial market condition, will have much higher lending rate, issuing their own currency.

First, you would expect Greece willingness to borrow will decrease greatly, and due to high rate, more careful on their balance sheet. Simple example is, my lifestyle will be different if i got 15% pa loan vs 2% pa loan... 15%, i will scare everyday, calculating on everything while 2%....can i borrow more?

Secondly, ok let say high rate liao, gov still got high debt and unable to pay back....will they need to default and claim bankrupt? No need, printing machines is theirs. Last century still got country stupid enough not to use their printing press and claim bankrupt on their own currency. However, countries that gone bankrupt, normally are those debt that they do not own the printing press. Countries like latin america eg argentina gone bankrupt before...but it was US debt that they defaulted.

Have Greece not join EU, no matter how high their debt is, they will never gone bankrupt, provided their high debt is denominated in their own currency.

But they are in EU, and bankrupt is their only choice...they do not own the machines. But a big chunk of Greece debt, is actually being monetized by Super Mario (EU central bank head), so actually EU also open their printing press to help up. Central bank in Euro actually helping the bankrupt greece.

So stop blaming on human nature. If rule that set is like that, the way human nature behave will all be expected. Stop blaming Greece has worse human nature. If thing happen in Singapore, giving singaporean cheap credit, gov blur blur not doing anything, this thing can also be happen in singapore....but i would not blame of singaporean human nature, i will blame the system for giving singaporean cheap access to irresponsibility. Unlike you, i will put my finger on the monetary system rather than blaming on singaporean as the root cause.

Hello uncle, you are becoming impossible here.
Having an occasional budget deficit is OK due to unforeseen circumstances but having a budget deficit for 10 years continuously is totally irresponsible!!
How much reserves is not the main issue but shrinking year after year and a bigger and bigger foreign debt is the issue.
Obviously having a large reserves has more advantage than a smaller one and when it get too small, it cannot withstand any attack like what happened during the Asian Financial Crisis!
This is spending more than you earn year after year, even lau beh wu lui also cannot like that ma!

You earn 5K a month and just because you have many credit cards you went on to spend 8,9K every month.
When you finally accumulate huge debts, you blame and fault the banks for issuing you the cards instead of your own irresponsible uncontrolled spending!

 

[rotikok]

Hello uncle, you are becoming impossible here.
Having an occasional budget deficit is OK due to unforeseen circumstances but having a budget deficit for 10 years continuously is totally irresponsible!!
How much reserves is not the main issue but shrinking year after year and a bigger and bigger foreign debt is the issue.
Obviously having a large reserves has more advantage than a smaller one and when it get too small, it cannot withstand any attack like what happened during the Asian Financial Crisis!
This is spending more than you earn year after year, even lau beh wu lui also cannot like that ma!

You earn 5K a month and just because you have many credit cards you went on to spend 8,9K every month.
When you finally accumulate huge debts, you blame and fault the banks for issuing you the cards instead of your own irresponsible uncontrolled spending!

Please do some calculation to prove your point la, i feel like arguing with a kindergarten kid to explain basic economy, really beh tahan...how much had you been brainwashed...or you dont know that a lot of your so call conventional thinking is actually either wrong or inaccurate.

"having a budget deficit for 10 years continuously is totally irresponsible" Normally we calculate debt based on GDP. Rmb, i used the word, "manageable budget deficit". If each year budget deficit is 3% while economy growth is 5%, over years you will have shrinking debt to GDP ratio right?

YOu can argue irresponsible spending on unproductive things (this we dont know the detail, but you are not arguing on this aspect). But 3% deficit each year, why irreponsible? And when GDP growth is drop to 3%, having 1% budget deficit, is very very very, let me stress again, very responsible. I do find a lot of idiot, like to have budget surplus and unwilling to spend just to have budget surplus when a lot of the economy sector need funding to grow....this in long run will badly affecting and slow down the economy.

See, you are in conventional thinking of surplus means good. Are you Mr. I? what I, read above.

"How much reserves is not the main issue but shrinking year after year" <--again wrong fact, i had said, stable above USD 90B after 2015, and is permissive to drop further depend on situation.

"bigger and bigger foreign debt is the issue." You type fun fun, so bad i have to answer back correctly....since when ~25% of foreign debt denominated in foreign currency is a big issue? DOnt just look at debt, what currency you should ask. If cant understand the relationship, study more please!

You again have skin deep understanding on asian economy crisis. Root cause: overvalue currency value that was artificially high for too long that prone to attack. If you want to maintain a high value peg, no matter how high your reserves is, you cant survive, your reserves, no matter how high, will instantly dry out. There are also other sides of arguements like financial system stablity, financial regualtion/ruling, policy etc that you can argue on, let not deal deeper as it is not meaningful to me unless you can put out a legit explanation that i never heard before....but what you said is reserves is actually very afterwards liao and the differences of reserves high or low is just mati fast or slow...maybe better outcome is drowning mati.

Lastly bad analogy again. Example you drawn is bad irresponsible spending. Where is my income growth? Where doesnt it show that i borrow within my means?

Sorry for my hard words....but I do not find arguing with you meaningful. A lot of replies that you send, doesnt make me learn anythings and Im someone who willing to learn if i found out something that i know is wrong. Do you have a basic economy or finance degree? I feel like arguing with a philosophy degree graduate. I think i had correect a lot of your philosophy understanding more than you correct my finance understanding.

 

[snowbird]

Please do some calculation to prove your point la, i feel like arguing with a kindergarten kid to explain basic economy, really beh tahan...how much had you been brainwashed...or you dont know that a lot of your so call conventional thinking is actually either wrong or inaccurate.

"having a budget deficit for 10 years continuously is totally irresponsible" Normally we calculate debt based on GDP. Rmb, i used the word, "manageable budget deficit". If each year budget deficit is 3% while economy growth is 5%, over years you will have shrinking debt to GDP ratio right?

YOu can argue irresponsible spending on unproductive things (this we dont know the detail, but you are not arguing on this aspect). But 3% deficit each year, why irreponsible? And when GDP growth is drop to 3%, having 1% budget deficit, is very very very, let me stress again, very responsible. I do find a lot of idiot, like to have budget surplus and unwilling to spend just to have budget surplus when a lot of the economy sector need funding to grow....this in long run will badly affecting and slow down the economy.

See, you are in conventional thinking of surplus means good. Are you Mr. I? what I, read above.

"How much reserves is not the main issue but shrinking year after year" <--again wrong fact, i had said, stable above USD 90B after 2015, and is permissive to drop further depend on situation.

"bigger and bigger foreign debt is the issue." You type fun fun, so bad i have to answer back correctly....since when ~25% of foreign debt denominated in foreign currency is a big issue? DOnt just look at debt, what currency you should ask. If cant understand the relationship, study more please!

You again have skin deep understanding on asian economy crisis. Root cause: overvalue currency value that was artificially high for too long that prone to attack. If you want to maintain a high value peg, no matter how high your reserves is, you cant survive, your reserves, no matter how high, will instantly dry out. There are also other sides of arguements like financial system stablity, financial regualtion/ruling, policy etc that you can argue on, let not deal deeper as it is not meaningful to me unless you can put out a legit explanation that i never heard before....but what you said is reserves is actually very afterwards liao and the differences of reserves high or low is just mati fast or slow...maybe better outcome is drowning mati.

Lastly bad analogy again. Example you drawn is bad irresponsible spending. Where is my income growth? Where doesnt it show that i borrow within my means?

Sorry for my hard words....but I do not find arguing with you meaningful. A lot of replies that you send, doesnt make me learn anythings and Im someone who willing to learn if i found out something that i know is wrong. Do you have a basic economy or finance degree? I feel like arguing with a philosophy degree graduate. I think i had correect a lot of your philosophy understanding more than you correct my finance understanding.

From your reply, it just shows how little you knows about economics.
Having budget deficit for 10 years continuously is totally irresponsible!!
Before going further, you must first have to know why and how did deficit happened.

If govt. is attempting to stimulate economic growth with borrowed money on eg. building schools and universities, then perhaps we'll see the fruits of this in the near future.
However, if they are incurring debts due to reduced revenue and to meet obligations and the economic growth is not matching, then future debts servicing will be big problem.
In MY's case, how are you concluding the debts accumulation is due to the first or second reason?

I'm very sure that to you, when the country's GDP is high, the economy is good and the people are better paid and will be spending more and consumption increased, very old school.
Not exactly true!
We all know what GDP is but the indications can sometimes be misleading and doesn't reflect a true picture of the nation's overall economics and social health.
Example, wealth/income distribution.
In some country, they are having very high GDP year after year but the wealth generated belongs only to the country's top earners (and politicians) which is less than 5% of the total population while a high percentage of the population is in poverty (eg. Philippines).

And then there is inflation.
High GDP usually comes high inflation.
Inflation in MY was much higher that expected which means people have to spend more money to buy the same amount of goods and service.
So the higher spending and expected increased consumption that comes with higher GDP is not real.

On foreign debts.
In 2015, govt. debt was at 54.5% just shy of Malaysia's 55% debt ceiling, any higher will straight away lower the country's credit rating!
The PM had promised last year to reduce its large budget deficit and also said : "We will continue to ensure economic indicators - such as inflation levels, growth rates and debt levels - remain strong and resilient, reflecting the core fundamentals of the economy," 
But today, we can see nothing much had been achieved.
If large budget deficit and foreign debts keep rising is no issue, why do you think the PM bothers to issue assurance to the public and investors??
Or because the PM don't think like you?

On National Reserves.
Reserves shrink every year is alarming.
With a small reserves, it leave the Central Bank little options when the currency is being attacked or when a major economic crisis occurs or being struck by a serious natural disaster, you just don't have enough bullets to fight.
SG and HK understands this hence they had an agreement to work together with their combined Reserves in an event of any party being attacked.
The other issue is why is it shrinking? Where had the money gone? Is it a good thing?
I don't know and maybe you are smarter and you know so can you please answer this?

 

[rotikok]

From your reply, it just shows how little you knows about economics.
Having budget deficit for 10 years continuously is totally irresponsible!!
Before going further, you must first have to know why and how did deficit happened.

If govt. is attempting to stimulate economic growth with borrowed money on eg. building schools and universities, then perhaps we'll see the fruits of this in the near future.
However, if they are incurring debts due to reduced revenue and to meet obligations and the economic growth is not matching, then future debts servicing will be big problem.
In MY's case, how are you concluding the debts accumulation is due to the first or second reason?

I'm very sure that to you, when the country's GDP is high, the economy is good and the people are better paid and will be spending more and consumption increased, very old school.
Not exactly true!
We all know what GDP is but the indications can sometimes be misleading and doesn't reflect a true picture of the nation's overall economics and social health.
Example, wealth/income distribution.
In some country, they are having very high GDP year after year but the wealth generated belongs only to the country's top earners (and politicians) which is less than 5% of the total population while a high percentage of the population is in poverty (eg. Philippines).

And then there is inflation.
High GDP usually comes high inflation.
Inflation in MY was much higher that expected which means people have to spend more money to buy the same amount of goods and service.
So the higher spending and expected increased consumption that comes with higher GDP is not real.

Part 1
Now, I do find a lot of conflict between your reply, and previously what you wrote. Let's dig out the error first.

Error 1: stimulate economic growth with borrowed money.

I do not know how you define stimulus and can use this word under that context. First, stimulus is a unconventional measure used when economy is in recession, like the name suggest, it can be drastically manipulating on interest rate, using unconventional policy or increase gov spending...and the scale is massive in order to resuscitate the economy. You see China, US, EU the scale of stimulus during recession.

Gov got income, and when gov spending more than income, it will have budget deficit. Again, is the scale/size problem. I wont not take such scale and call it "stimulate economic growth with borrowed money". Fact: the gov do not stimulate the economy every year, the gov is just overspending that is within their means.

if they are incurring debts due to reduced revenue and to meet obligations and the economic growth is not matching

Again, such concern will not arise based on what I said. If real growth is 5%, and they limit their overspending by 3%, even they have smaller revenue income in subsequent year, they are still allowed to overspend by 3% and overtime shrinking debt to GDP ratio (isnt this ratio is what you are after?). So depend on the degree of shrinking gov revenue, they may not spend more compare to last year after overspend by 3%. <--ok la, quite verbal, hope i dont need to put out some number to prove my point, can understand?

And what economic growth is not matching? I thought all the while we were talking about GDP high growth with some certainty?

Simply, if got revenue drop badly until the point where the government need to overspend more than their GDP growth % in order to make up previous year spending level, then this is overspending. However if they insist to just overspend 3% regardless able or not to make up previous year spending level, this, the debt is within control.


OK, this is where you conflict, and slap yourself a big palm on your own face. You think GDP is a bad indicator....seem like you doesnt even willing to admit such calculation is in any sense a valid calculation? Good..good. And you are the one keep quoting on debt level based on GDP and say malaysia is in a big trouble, while on the other hand think that calculation based on GDP is stupid. Ouchhh! Actually you dont believe such calculation, why even bother to think 55% debt is a sibeh big problem, you dont believe 55% calculation is even valid in first place.

Again, I never say "GDP is high, the economy is good and the people are better paid ". If I would do that, I will use other indicator, and not use GDP, GDP doesnt tell how good the overall people are doing, and i knew the limitation.

Now I challenge you, loser!, Find out where i got tell in my previous post, "high GDP means people are doing well", any such related argument that i put out? If cant, please kindly admit, you are putting your own words "I'm very sure that to you when the country's GDP is high...people are better paid....very old school" into my mouth.

As for the inflation, High GDP usually comes high inflation actually means the economy is very healthy as it means that the wealth distribution is normal. But need to be careful what type of inflation it is, is it imported inflation or consumption based inflation (increase in M2 money supply). <---ok i know very difficult to understand, just tell me in your next post if you want me to elaborate on this point. If not, i assume you know what im saying.

The situation where you say, 5% control most wealth, such economy, when inflation arise, higher chances it will be imported type of inflation.

Anyway, whatever inflation it is, has nothing to do with a gov's ability to repay its debt. <--cant understand? ask, rather than come out with your logical flawed self created explanation on how poor people, gov still able to dig money out from them to repay gov debt.

 

[rotikok]

On foreign debts.
In 2015, govt. debt was at 54.5% just shy of Malaysia's 55% debt ceiling, any higher will straight away lower the country's credit rating!
The PM had promised last year to reduce its large budget deficit and also said : "We will continue to ensure economic indicators - such as inflation levels, growth rates and debt levels - remain strong and resilient, reflecting the core fundamentals of the economy," 
But today, we can see nothing much had been achieved.
If large budget deficit and foreign debts keep rising is no issue, why do you think the PM bothers to issue assurance to the public and investors??
Or because the PM don't think like you?

Part 2
1. 55% debt ceiling is set up by malaysia gov, not mandatory, and if needed they can extend their debt ceiling level again.
2. "any higher will straight away lower the country's credit rating!"
This, i dont think rating agency will just see, hey, you touch your self constraint limit, you are a bad ass, and i will lower your credit rating. No! touching 55% is still very low by global standards, no rating agency will think malaysia credit risk has increased.
3. Perhaps you should ask yourself, why 55% is the magic hurdle that once crossed, malaysia credit risk will increase? Why dont they set higher? like denmark 75%, Poland 60%, US cant rmb change how many time liao.

PM bothers to issue assurance to the public and investors
This touched a very important issue, call confidence. Confidence cannot be quantify, like what i do, therefore gain how much confidence<--this cannot be quantify....and confidence directly impact short term economy greatly.

Think about it, opposition in malaysia keep brainwash their people to believe, hey 55% malaysia bankrupt, malaysia gov is doing badly, Najib take all the money from the government liao etc etc. This, even debt reach 55% and nothing has happen, uneducated people will start to believe and unwilling to invest or tightening their belt unwilling to spend.

So this is actually very funny. malaysian confidence will be badly affected by those not so bad, not harming economic data, but opposition try to mislead ppl to believe it is very bad economic data, and therefore stupid malaysian will start to believe malaysia was indeed performing badly and malaysia economy confidence will hurt, and this injured confidence will lead to malaysia economy perform badly, not because the real underlying performing bad, is people think it is bad therefore perform badly.

PM did think like me, so many economists surrounded to give him advises. It is just that many public do not think like we do, and buy into opposition scares tactic, harmed malaysian confidence on the economy to the following year, that will be bad to the economy. PM bother to come out to give assurance, not because he think those data is alarming, but to calm people who think that those data is alarming.

Think about it, Najib corruption, if not being caught by opposition, and 100% ran away, 100% confidence maintain because nobody know, do you think 600M USD will drag malaysia economy? Come on, 600M usd is a lot but najib do not corrupt few hundred billions that will put malaysia into detrimental impact. People has lose confidence on malaysia PM, as well as BN, that has more economy impact than what really the amount that he actually corrupted.

 

[rotikok]

On National Reserves.
Reserves shrink every year is alarming.
With a small reserves, it leave the Central Bank little options when the currency is being attacked or when a major economic crisis occurs or being struck by a serious natural disaster, you just don't have enough bullets to fight.
SG and HK understands this hence they had an agreement to work together with their combined Reserves in an event of any party being attacked.
The other issue is why is it shrinking? Where had the money gone? Is it a good thing?
I don't know and maybe you are smarter and you know so can you please answer this?

Adui, you put out a same argument again. Do you understand the relation btw currency exchange rate and foreign reserves? Or the impossible trinity?

Small reserves... then why US116B usd Canada 83 B USD and ECB 75B USD, Aus 49 B USD foreign reserves....all got so little reserves, dont they afraid of malicious currency attack?

The other issue is why is it shrinking? Where had the money gone?
I already explain liao la, either you dont believe...or cant understand.

Facing an attack, self doing a currency depreciation is better than anything, do not maintain a high peg and use reserve to defend it. like malaysia and sg auto depreciate their currency during asian financial crisis.

Only your point on natural disaster is valid. Have you realised, when a country central bank talk about their nation reserve, they are stressing about such level reserve able to support how many months of import/export needs. Like I said before in my previous post, China optimum reserves is around 2.6 T, they do not want to own more or less reserves.

Ohhh yea....small reserve, how do you quantify what level of reserve is small, what level of reserve is huge? Using singapore as indicator? Sg ranked number 10.

Or even simpler, before and after comparison. Like Sg 250B, if within 6 months drop to 200B, then you goin to say singapore got small reserve?

 

[snowbird]

Adui, you put out a same argument again. Do you understand the relation btw currency exchange rate and foreign reserves? Or the impossible trinity?

Small reserves... then why US116B usd Canada 83 B USD and ECB 75B USD, Aus 49 B USD foreign reserves....all got so little reserves, dont they afraid of malicious currency attack?

The other issue is why is it shrinking? Where had the money gone?
I already explain liao la, either you dont believe...or cant understand.

Facing an attack, self doing a currency depreciation is better than anything, do not maintain a high peg and use reserve to defend it. like malaysia and sg auto depreciate their currency during asian financial crisis.

Only your point on natural disaster is valid. Have you realised, when a country central bank talk about their nation reserve, they are stressing about such level reserve able to support how many months of import/export needs. Like I said before in my previous post, China optimum reserves is around 2.6 T, they do not want to own more or less reserves.

Ohhh yea....small reserve, how do you quantify what level of reserve is small, what level of reserve is huge? Using singapore as indicator? Sg ranked number 10.

Or even simpler, before and after comparison. Like Sg 250B, if within 6 months drop to 200B, then you goin to say singapore got small reserve?

I repeat again what I said :
Having an occasional budget deficit is OK due to unforeseen circumstances but having a budget deficit for 10 years continuously is totally irresponsible!!
How much reserves is not the main issue but shrinking year after year and a bigger and bigger foreign debt is the issue.
There are 3 issues here :
continuous budget deficit.
Shrinking national reserves
growing foreign debts.

Of the countries you mentioned about their reserves, MY is the one that is rapidly shrinking while the others are actually growing.


Australia

Canada

Malaysia.

See the way MY's Reserves shrink within 5 years compare with the others.

You suggest that by devaluing the currency is the best solution for MY to face off an attack on the RM.
By doing this, it'll only cause high inflation immediately and as for its export, it does not help.
The main export for MY is mostly commodity - crude oil, LPG, palm oil, rubber, etc. which are all pegged to international prices and usually in US$.
Unlike for example China whereby most export are manufactured products whereby they control the price and decides how much to charge.

I said : any rise in debt ceiling will straight away lower the country's credit rating.
This debt ceiling is self imposed so that the credit rating remains favorable while the rating also tells your ability and resources to service the loan.
Banks study your credit rating before giving out the loans and the better your rating, the better the deal you'll get.

PM bothers to issue assurance to the public and investors
This touched a very important issue, call confidence.
Yes, it is the confidence that is thinning which resulted in rapid exodus of foreign funds, hence he need to issue assurance but able to do as said is questionable.
Big time foreign investors are not kampong folks and listen to rumors to make business decisions so all the noise from opposition is just noise.

I said : I'm very sure that to you, when the country's GDP is high, the economy is good and the people are better paid and will be spending more and consumption increased, very old school.


For goodness sake, I did not say you said but would believe you'll think that way, please read carefully!
You just need to say agree or disagree.

I asked :
If govt. is attempting to stimulate economic growth with borrowed money on eg. building schools and universities, then perhaps we'll see the fruits of this in the near future.
However, if they are incurring debts due to reduced revenue and to meet obligations and the economic growth is not matching, then future debts servicing will be big problem.
In MY's case, how are you concluding the debts accumulation is due to the first or second reason?

Your answer was : Fact: the gov do not stimulate the economy every year,

So, the answer is overspending which is definitely no good and worse, inflation is much higher than GDP growth!
Your argument is always that even with budget deficit but high GDP growth, it will offsets the negativity.
High GDP is not an accurate measure of the country's progress and the worse is that GDP can actually be manipulated or "cooked the books" to suit the intention so how to trust something that can be manipulated
GDP measures only output, and makes no claims on the quality of that output whereas a budget deficit is tangible overspending.
GDP growth that shows total income increase do not show distribution so when country with high GDP also experience high poverty levels.

Another good example of a bad example is the multi-billion ECRL whereby the Chinese will be building.
It'll increase the GDP, don't create much employment but only incurred a massive debt ( overspending again maybe for a white elephant) with the economic benefits that it supposed to bring absolutely questionable.
Just look at the current north/south railway line between JB and Padang Besar at the Thai border with more than 30 stations along the way.
Besides the major city like KL, Ipoh, Butterworth, the rest are all quiet sleepy town from day one the rail started operation.
And will the ECRL suddenly make all the quiet sleepy town along its way into booming cities?

 

[rotikok]

I repeat again what I said :
Having an occasional budget deficit is OK due to unforeseen circumstances but having a budget deficit for 10 years continuously is totally irresponsible!!
How much reserves is not the main issue but shrinking year after year and a bigger and bigger foreign debt is the issue.
There are 3 issues here :
continuous budget deficit.
Shrinking national reserves
growing foreign debts.

Of the countries you mentioned about their reserves, MY is the one that is rapidly shrinking while the others are actually growing.

View attachment 30116
Australia
View attachment 30117
Canada
View attachment 30118
Malaysia.

See the way MY's Reserves shrink within 5 years compare with the others.

You suggest that by devaluing the currency is the best solution for MY to face off an attack on the RM.
By doing this, it'll only cause high inflation immediately and as for its export, it does not help.
The main export for MY is mostly commodity - crude oil, LPG, palm oil, rubber, etc. which are all pegged to international prices and usually in US$.
Unlike for example China whereby most export are manufactured products whereby they control the price and decides how much to charge.

I said : any rise in debt ceiling will straight away lower the country's credit rating.
This debt ceiling is self imposed so that the credit rating remains favorable while the rating also tells your ability and resources to service the loan.
Banks study your credit rating before giving out the loans and the better your rating, the better the deal you'll get.

PM bothers to issue assurance to the public and investors
This touched a very important issue, call confidence.
Yes, it is the confidence that is thinning which resulted in rapid exodus of foreign funds, hence he need to issue assurance but able to do as said is questionable.
Big time foreign investors are not kampong folks and listen to rumors to make business decisions so all the noise from opposition is just noise.

I said : I'm very sure that to you, when the country's GDP is high, the economy is good and the people are better paid and will be spending more and consumption increased, very old school.


For goodness sake, I did not say you said but would believe you'll think that way, please read carefully!
You just need to say agree or disagree.

I asked :
If govt. is attempting to stimulate economic growth with borrowed money on eg. building schools and universities, then perhaps we'll see the fruits of this in the near future.
However, if they are incurring debts due to reduced revenue and to meet obligations and the economic growth is not matching, then future debts servicing will be big problem.
In MY's case, how are you concluding the debts accumulation is due to the first or second reason?

Your answer was : Fact: the gov do not stimulate the economy every year,

So, the answer is overspending which is definitely no good and worse, inflation is much higher than GDP growth!
Your argument is always that even with budget deficit but high GDP growth, it will offsets the negativity.
High GDP is not an accurate measure of the country's progress and the worse is that GDP can actually be manipulated or "cooked the books" to suit the intention so how to trust something that can be manipulated
GDP measures only output, and makes no claims on the quality of that output whereas a budget deficit is tangible overspending.
GDP growth that shows total income increase do not show distribution so when country with high GDP also experience high poverty levels.

Another good example of a bad example is the multi-billion ECRL whereby the Chinese will be building.
It'll increase the GDP, don't create much employment but only incurred a massive debt ( overspending again maybe for a white elephant) with the economic benefits that it supposed to bring absolutely questionable.
Just look at the current north/south railway line between JB and Padang Besar at the Thai border with more than 30 stations along the way.
Besides the major city like KL, Ipoh, Butterworth, the rest are all quiet sleepy town from day one the rail started operation.
And will the ECRL suddenly make all the quiet sleepy town along its way into booming cities?

Reserve: Before i answer your question, perhaps you should answer mine, how do you determine reserve level, how do you determine whether it is high or low?
How much reserves is not the main issue ok thank you for answer that.

So the problem with malaysia reserve, is not bcoz it is on low dangerous level....but merely bcoz it shrinked in the past 5 yrs（and thank for the chart, see, starting in mid 2015
onward, it quite stable right? Your chart did prove my point).

I wonder why people just look at the past increasing or past decreasing chart and determine its healthiness? I want to argue sensibly....but you are totally senseless.

Ok la, malaysia has too much reserve liao, so spend a bit lor...why canada and aust increase? bcoz they have too low reserves liao, so they have to save.

Canada economy size is ~1.5 T yet only has 80B+ usd, Aust is 1.6T yet only has 60B+ usd...malaysia economy size is only 300B usd+ and has almost 90B usd.... so malaysia beh song those country economy so big yet only so little reserve, so why not spend! From 140B spend to 90B...and hey, by ratio, malaysia still much safer than canada/australia.

Now see, increasing or shrinking....doesnt matter, malaysia still healthy if compare with aust or canada.

Now answer my Q:if singapore reserve shrink from 200B to 150B in 6 months time, do you think it will be a problem? Even china from 4T drop to 2T+ within months, problem? Now back up to 3T? China is performing liao? Why exchange rate still drop while reserve increase from 2 to 3 T?

The main export for MY is mostly commodity - crude oil, LPG, palm oil, rubber, etc. which are all pegged to international prices and usually in US$.
Unlike for example China whereby most export are manufactured products whereby they control the price and decides how much to charge.

Stop making silly mistake: those items are globally priced in USD, weaker MY will be favourable for malaysia export, crude, palm oil, rubber etc.

I hate to correct your mistake. But i like your braveness, despite knowing nothing, yet still want to argue senselessly, sibeh diehard spirit.

Either you allow exchange rate to depreciate to reflect market reality, or use your reserve to maintain your artificially high exchange rate. You will be in deeper trouble if your reserves drop to dangerous level or dry out. Ok, you decide la, high inflation or dangerous low reserves.

Big time foreign investors are not kampong folks and listen to rumors to make business decisions so all the noise from opposition is just noise.
Hello, ordinary ppl are the one stay in malaysia, use its currency. So you are saying foreign investors decide malaysia economy confidence.....sense? So malaysian zero spending bcoz everyone so afraid bankrupt, today spend, tml no money liao, local zero confidences liao...but foreign investors 100% confidence, nvm, malaysia can survive on foreign confidence.....please say some human words!

inflation is much higher than GDP growth What do you mean? Under what circumstance inflation will higher than growth, not entirely cant happen, but the way you said it, is like did something then inflation surely will higher than GDP growth. Are you trying to say gov overspending, surely will lead to inflation? What is your indicator to read CPI? Understand anything about base money, M1, M2 M3?
any rise in debt ceiling will straight away lower the country's credit rating.....This debt ceiling is self imposed ok la, slap your face first, in the past malaysia had raised the ceilling for few times...creedit rating not affected. US even worse, keep raising and raising....so many times, only S&P drop it to AA+. Fitch and Moody all remain highest ratings. You are insist on something that you cant even able to prove your point.

I dont know laa....give up liao. Explain waste too much time, some more you cant understand and reply with many common sense mistakes.

Ok la, final question: do you think malaysia able to repay its debt? and debt increased at manageable level?

 

[snowbird]

Ok la, final question: do you think malaysia able to repay its debt? and debt increased at manageable level?

Wah, a very big question which I think is very difficult to reply in few sentences here.
But positive or negative answer to the question depends on 2 main factors - from internal and from external.
External is beyond control, example like crude oil and LPG prices, foreign policies, so have nothing to add.
But internal can be controlled to achieve the objective just whether there is enough political will to do so.
Actually, my concern earlier about shrinking reserves and growing debts are all part of this mega internal problem.

Earlier, I mentioned about Greece's bankruptcy because there are several parallels happening here.
* Heavy borrowing - never mind about the easy credit part but the simple fact remains - heavy borrowing which needs to be paid back.
* Budget deficit - since you had agreed it was due to overspending, lets see on the what, how and why.
Attempts were made to cut budget due to reduced revenue because of falling crude price but unfortunately, deep cuts were made to all the wrong places like Education and Healthcare whereas PM Dept was allocated with more funds.
Everyone knows that Education is one of the country's most important dept that nurtures and educate future generations, equipping them with relevant skills, all except this Education Minister.
But the biggest culprit on overspending is the super bloated civil service.

http://www.thestar.com.my/metro/vie...used-to-pay-salaries-and-pensions-of-govt-st/

Now MY is top of the world in with the largest civil service relative to the population.
According to this recent report, as much as 80% of annual budget goes "towards operating expenditure and a large chunk of this is to pay for salaries and pensions."
Can they improve productivity by cutting some staff when they are employing more than 2 people to do 1 person's job?
No, it will be political suicide for the ruling party and high unemployment is also an economic disaster, a catch 22 situation; the German chief who cut a few thousand staff in MAS to reduce expenditure cost and improve productivity was attacked and condemn from all fronts that he has to resign.
*Employment of political supporters - These people, many are just dim duds, were offered top post in GICs, further draining resources.
*Non Transparent Accounting - some call it cook to books. Within stat boards, there are too many "borrow from Peter to pay John' incidents.
Pension Fund KWAP loan of RM4.3 billions to bankrupted 1MDB's subsidiary SRC is still unaccounted for while SRC can pay tens of millions into the PM's private bank account (proven but no one asked why and how and still nothing done to recover back the $$$) And incidentally, 1MDB and SRC is still unaudited for few years!
All these, happened in one way or another in Greece which contributed to the final bankruptcy.

*Misuse of Funds -I won't say its corruption but projects were initiated with noble intention but ended up stinking to high heaven, good example 1MDB.
Projects supposed to make country self sufficient in beef but ended up with a certain family all became high flying top executives (very sky high pay to match of cos) and several luxury condos but no cows (now famous cows and condo scandal).
Chartered a whole plane to send the PM's wife overseas to collect an insignificant award when a 1st class ticket cost just a fraction.
*Public Confidence - The massive foreign funds exodus is not for nothing and lacking confidence is one of them. FDI, which is important for employment and economic growth, is not growing
*Corruption - In 2016, MY ranked at 55 while Greece was at 69, maybe that's why Greece died faster la. So, will things change for the better if the ranking goes to 20 (Japan), I think absolutely but highly impossible.
*Growing Unemployment - Although there mega projects going on but employment of locals is not correspondingly increased. Many graduates were unemployed
"More youths are now unemployed as the number of graduates is growing faster than the creation of high-skilled jobs in Malaysia, a research report by the Penang Institute revealed".
Worse, unemployed youths in the age group of 20 to 24 is 9.3%, which is 3 times the average unemployment rate of 3.5%.

http://www.themalaymailonline.com/m...h-skilled-jobs-available#sthash.rWEK0Pre.dpuf

Now, with all of these above plus the rapid shrinking national reserve, ever growing debts level and falling RM so, barring all external factors, what is your conclusion, please tell me my concern is 杞人忧天， or like the cantonese saying - 多鸠余！
The saving grace compared to Greece is the abundance in products like crude oil and LPG which comes from the ground, rich in raw agriculture produce like palm oil, rubber, cocoa and agriculture edibles like chicken/eggs/veggies & fruits daily to SG.
You always claim to have a better understanding on economics, perhaps I can really learn something from you.
For me, I can only answer you that if things don't improve significantly, the situation just get worse.