Positive Economic Growth: Whom are we kidding?

‘In Malaysia, economic growth is projected to moderate to 5.2% yoy in 2011, before rising to 5.5% in 2012. Structural impediments in net exports will drag down overall GDP growth in 2011, while domestic demand likely strong due to supportive government policy measures’.

                                                                                    -Malaysian Institute of Economic Research-

The statement above comes from MIER and is uploaded and available on their official website, to be honest, with the current developments, of the so called global economic climate (as the politicians coined), rising production costs, diminishing purchasing power due to inflation/rising prices, do we seriously still believe that our economy will chalk positive growth? (Whom are we kidding? I don’t think any of us could see this happening). Econ 101 (basic Economics) teaches us that when aggregate supply shift to the left (which we predict would happen with the fast rising cost in production whereby suppliers of these final goods and services faced rising costs and had to reduce their supply at all price levels hence the decrease in aggregate supply, or the left shift of it ). On the other hand, aggregated demand shift to the left because of reduced purchasing power, If consumer expect a recession then they will not spend as much money today as to "save for a rainy day". Thus if spending has decreased, then our aggregate demand must decrease, and shift to left. If either of this happens, the output of the economy will decrease, imagine if both prevails…..

You don’t have to be an Economist or Rocket scientist to predict the end result....it is just not possible to chalk positive economic growth...and only MIER knows what they meant by ‘supportive government policy measures’.

You can fool some people some time..but.....you can’t fool all the people all the time....

bye...for now...a.h.baharom