Effects of inflation on the malaysian economy economics essay

Here are some aspects of the impact of unemployment on our society: However, any Malaysian companies that wishes to list in Malaysia would still need to offer 50 percent of public shareholding spread to Bumiputera investors. If this is taken into account, Malaysian exports are likely to fall further.

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.

So wrong on both factual and theoretical grounds. Growth of a nation depends to a large extent on employment. Three external factors Malaysia has been hit by three external factors: The economy is also influenced by the government through agencies such as the Economic Planning Unit and government-linked wealth funds such as Khazanah Nasional BerhadEmployees Provident Fund and Permodalan Nasional Berhad.

Due to speculative activities, the Ringgit fell to as much as RM4. Therefore, the nation not only has to deal with the lost income and decreased production but also with additional cost. The continental shelf is divided into three producing basins: Employees may also start to bargain for higher pay which can cause the cost-push inflation to worsen 3.

The report also says "The electronic equipment, petroleum, and liquefied natural gas producer will see a substantial increase in income per capita. This leads net commodities-exporting countries like Malaysia to contend with currency weakening issues.

High rate of inflation causes severe fluctuations in exchange rates. It has been suggested that the lack of transparency over 1MDB has lowered investor confidence contributing to the foreign capital outflows, which in turn has impacted the ringgit.

Meanwhile, many aspects of capital control have been slowly relaxed by Bank Negara Malaysia. What does this tells us? If the plummeting value of ringgit persists and threaten the economy, we may expect the government to impose capital controls to protect the economy.

The socially most disadvantaged groups will be the one affected as fuel expenditure will now take up a larger portion of their disposable income 1. Logistic firms fall under this 5. High levels of investment played a significant role in this.

The government stated that the Ringgit will be internationalised once it is ready. The unemployment overall tension can increase dramatically general health issues of individuals. This would only further hamper economic growth.

This theory is propounded by economist William Philips and this gave rise to the Philips Curve.

Inflation And Economic Growth

This is totally misguided for a number of reasons: In the business world, firms are fiercely fighting with one another to survive. Past performance, current position of the company and future trends decide how much money, in form of bonus or dividend is to be returned to the investors.

When prices are falling people are reluctant to spend money because they are concerned that prices will be cheaper in the future, therefore, they keep delaying purchases. Followed by the strengthening of US dollar, ringgit is unlikely to fare well against greenback in the present.

For example, it may be difficult to cut nominal wages workers resent wage cut. This causes firms to increase the price of their goods and services. Employers find employment gasps as a negative aspect. This is true whether you use the Gini coefficient, or a decile approach i. If wages are sustained at the low level or drop further in an additional attempt to decrease inflation a continual decline in economic activity occurs.

Thus, colleges and universities will have to buck up and spend more on attracting and recruiting students in future.

If wages fall then fixed costs per unit will also fall. Tourism boost Image Credit: Crime is related to supply of criminals, which will naturally increase with an increase in the population, all other things equal.Cause and Effect of Unemployment. Group # 3 WHAT IS UNEMPLOYMENT?

Unemployment is caused by many factors in a modern economy. It can be caused by rapid technological change, willingness and perception of an employee, discrimination in the work place based on race, color, religion, ethnicity, age and class. Learn more about the Malaysia economy, including the population of Malaysia, GDP, facts, trade, business, inflation and other data and analysis on its economy from the Index of Economic Freedom.

Oct 01,  · If the impact is major, then in the short run, Malaysian economy may experience a stagflation (stagnant growth and inflation) 4. Some firms in the economy will definitely be affected by such ruling especially those where fuel costs make up a large portion of total costs.

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.

GDP & Employment/Inflation.

Inflation Essay

Introduction The current GDP growth rate for the US economy stands at about %. It is interesting to note that in each of the last quarters of the years, the rate is higher, but at the start of a new year the rate decreases in.

Unemployment means being out of job or a situation where the individual is wiling to work but has none. This article brings and discusses the main issues/effects of the unemployment on our society and economy.

Effects of inflation on the malaysian economy economics essay
Rated 4/5 based on 48 review