Malaysia Economy Crisis

Let chat a little about Malaysia Economy crisis in this year - 2008. As what i know, this crisis caused by 3 reason :

1) Malaysia's Politic issue
2) US financial crisis/economy crisis
3) Crude oil price drop


1) Malaysia Politic issue
Malaysia stock market has a significant drop after election in March. People has no confidence to stock market especially Government link Company's stock(GLC) due to unstability of our government. The political issues has not end yet, that may be end up on next year..

2) US financial crisis/economy crisis
US financial crisis caused Lehman Brother bankcrupt, AIG nearly to bankcrupt if no government support and etc. Although Malaysia's bank has not much impact of this crisis, but investor was scared and try to sell off the stocks in hand. The economy in US is really down. But why US's economy will impact to Asia. Why Asia is always depend to US?

This is because many product is made in Asia and export to US.
Example:
if Asia produce clothes and export to US, when the US face economy crisis, US people just need to control their expenses and do not buy any clothes if not needed. But Asia people will face jobless because of the sales of the clothes is bad and company need to cut cost and try to fire some employee to make the company's earning and expenses become balance to pass this economy crisis smoothly.

Therefore, someone said if US getting a flu, Asia will get a serious illness.

3) Crude oil price drop
Recently, KLSE index has drop till 800-850. The main reason is because of the dropping of crude oil price. Crude oil price drop has negative and also positive impact to Malaysia.

Negative impact: Malaysia's economy depends on plantation industry, Crude Oil price drop means plantation industry making loss. Economy down.

Positive impact: Petrol price will drop accordingly, other material price will drop. Inflaction rate Drop.