Public sentiment on economic outlook not encouraging

MALAYSIANS have been severely impacted economically after the COVID-19 outbreak in early 2020. Thousands lost their only source of income when the country went into an economic downturn after nationwide lockdowns and travel situations limited economic activity. 

Despite the country showing signs of recovery, we cannot deny the fact that job losses have been in its worse in the last two years, according to the Department of Statistics, in 2021 alone 4.6% of Malaysians were unemployed also due to pandemic layoffs, recording the highest while 2020 recorded the second highest unemployment rate at 4.5%. 

This was due to the long economic and border shutdown, causing thousands to lose their job in various sectors. However, as we try to take a breath this year hoping for a recovery driven by a high level of vaccination rate against COVID-19, which has allowed for greater freedom in terms of trade, inflation came knocking on our doors. 

While number of jobs continued to rise to 8.57 million in the first quarter of Q1 2022, signaling a steady increase in jobs available in the market as the country continues to recover from COVID-19 and a moderate growth in salary, it is not enough to cover for the rise in inflation as a whole, especially for food. 

Statistically, about 60% of Malaysians had started to take on second jobs just to ease the financial burden. 

Cost of living is rising at a rapid rate while salaries are stagnant. (Photo credit: Bernama)


The sentiment of the people in regards to the economic outlook remains whether we could face this like how we did in the Asian Financial Crisis 1998-1999 and Global Financial Crisis 2008, combined with the current political tussle in the country. 

While salary growth, jobs and the GDP have recorded positives, it doesn’t necessarily translate to good public sentiment toward the economy.

It’s a fact that the average Malaysian is still in dire financial need and are struggling to make ends meet. This is highly due to the fact that salary growth has not caught up with the current rate of inflation which inevitably leads to rising food prices. 

As a net importer of food sources, Malaysia is subject to the shifts in the global economy. Global supply chain disruptions are showing signs of recovery. However, the Malaysian economy is currently going against a rising US dollar. 

Food prices have been affected as a result. While food inflation is continuing to rise, the inflation rate has marginally subsided in September 2022 at 6.8%, compared to 7.2% in August 2022.

Hence, while the Central Bank (Bank Negara) is taking measures to stabilise the ringgit against the tremendous hike of the greenback value by increasing the Overnight policy rate (OPR), interest rate hikes will put ringgit on the competitive note in attracting foreign investors into the country, leading to higher individual investment returns in funds and fixed deposits. 

While many believe that the OPR hike will only cause more pain than gain, little did they know that the ringgit will slide even further without the interest rate hike as the US Fed has signaled that they would increase another 75 basis point in their next sitting. 

As more efforts are made to strengthen the local note at these trying times as aims to shelve inflation hike, ultimately, the government, especially the Ministry of Domestic Trade and Consumer Affairs and the Ministry of Agriculture and Food Industries needs to play an important role in food security and price scrutiny to ensure the people are insulated from the global inflation hike.

With high prices smacked on staples such as chicken that could reach RM12 per kilo and RM30 for a normal kembung fish, let’s hope the dark cloud of uncertainty will be cast away post-November 19 elections. – Oct 26, 2022 


Main photo credit: bigstock 


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