DAP MP Liew Chin Tong urges the government to come up with ideas to weather an economic storm, expected in two years time.
Stressing that he is not trying to create a panic nor to gain politically mileage, DAP MP Liew Chin Tong urged stakeholders to come up with ideas on how Malaysia could weather such an eventuality.
“We should not mask ourselves with the goodwill our economy brings today. We must be prepared for future challenges,” he said.
For starters, Liew said that the soon to be adopted Goods and Services Tax (GST) would burn holes in the pockets of the lower and the middle income earners in the country, which would hurt domestic demand, the main driver of the nation’s economy.
Liew warned with GST, cost of living would skyrocket, which in turn would increase inflationary pressure on consumers.
“Malaysia may go the way of Europe and US by falling into a recession due to higher costing of goods and services, which will spike our inflation rate,” he said.
The DAP leader also said that the government should take into consideration the possibility of fuel prices going down in the global market, which would affect Petronas’ profits.
“Petronas in the main contributor the nation’s coffers. If it’s profits dwindle, it means that the country will have lesser money to contribute for government expenditure,” said Liew.
He added that the rising household debt ratio to the gross domestic product (GDP) and the recent downgrade by Fitch Ratings would affect the nation’s borrowings in the future.
“And will the property bubble in Malaysia implode anytime soon? he asked, as it seems to be running out of control speculations.
Liew added that the political impasse and the racial polarisation in Malaysia would also have an effect on the nation’s economic growth.
‘Oil palm prices under pressure’
On the external factor, Liew said that the government should be concerned if the US government decided to cut costs in its imports.
“The manufacturing sector will be drastically affected if US producers cut costs,” he said.
The parliamentarian also said that palm oil prices in the global market are under pressure due to competition from soya
“It will directly affect Malaysia’s agriculture sector, which is largely run by the lower and middle income groups,” said Liew.
Hence, the Kluang MP extends an invitation to the likes of economists, technocrats, socialists and politicians to deliberate on the matter, in order to find solutions in the event the country’s economy nosedives in 2015.