Malaysia entering recession......it is one of the headline from Business Times.
Below are the details of the news:-
MALAYSIA is entering a recession, if it is not in one already, head of RHB Research Lim Chee Sing said.
He predicts the economy to shrink 1.5 per cent this year, or possibly worse, depending on the state of development in the US and other bigger economies in the world.
At this rate, the recession seems set to be sharper than that in 1985 when gross domestic product (GDP) shrank by 1.2 per cent, but milder than the 7.4 per cent contraction in 1998.
"Depending on the definition you use, Malaysia is already in recession, or perhaps, is entering a recession," Lim told reporters during a discussion on the stock market in Kuala Lumpur yesterday.
A recession is commonly defined as a decline in the GDP for two or more consecutive quarters. But this definition is unpopular with many economists since it does not take into consideration changes in other variables such as jobless rate or consumer confidence.
"Malaysia's export has contracted for the third month, each time getting sharper. The industry production index has also fallen for three months, and at 15 per cent, it's even worse than the fall in October 1998," Lim said.
He is the latest in a growing group of private sector economists and research houses forecasting a domestic recession this year.
US bank Citigroup this week slashed Malaysia's economic forecast to a 1.5 per cent contraction, while Nomura Holdings Inc had predicted a 4 per cent fall this year.
We all know how severe this recession going to be. But any of us really prepare for the worse? I still remember there was a time our Deputy Prime Minister still denying the fact that Malaysia will eventually go to recession within this year. As for me, I do believe I'm well prepared to weather the storm as I have prepare a realistic financial goal since the start of the year as I foresee that we might go through a long recession.
Some of my plan includes:-
- tighter budget for own expenses which includes food, entertainment and some misc spending
- continue to reduce debt (car loan, education loan)
- invest in dividend counters as I foresee the Bank Negara will reduce the FD rate (which prove to be correct)
- earning extra income - planning to look for some freelance programming
So, what is your plan to weather the storm? Note that I do have cut spending on others but my plan include continuous investment as I believe in the long run, equity will outperform cash.