Worrying debt indicators

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Let’s take a look at some economic indicators that should give us an idea of the level of indebtedness in the country.

Household debt – 83 per cent of GDP

Federal government debt – 53 per cent of GDP

Federal government debt plus guarantees – 69 per cent of GDP

Corporate debt – 96 per cent of GDP

I don’t know about you, but I’m worried about this state of affairs – and all the while, BN leaders are diverting our attention from this level of indebtedness to the more divisive issues in our midst.

Figures above are from The Edge weekly, 12 August 2013

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31 Comments on "Worrying debt indicators"

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McMinion
McMinion
The fact that cars in Malaysia are being sold at 300% tax makes it the biggest liability for every Malaysian with a depreciation percentage of 10%-20% per year all because of PROTON! Can you imagine a Proton bought for 45k will cost only 20k in 3 years? You can sell it off and still have to fork out your own money to get rid of it entirely. By the way, Proton Preve is sold at only A$15K in Australia – effectively we are subsidising the Aussies! Properties will appreciate but with the average income of Malaysians, owning a house will… Read more »
Don Anamalai
Don Anamalai

Fitch sends us into the ditch?
Excessive spending and lack of financial prudence may further dampen Malaysian economy:

http://www.freemalaysiatoday.com/category/opinion/2013/08/24/fitch-sends-us-into-the-ditch/

JK
JK

Our useless government is just looking on because they are in it too….

Its a bubble….and hen it bursts it maybe much orse then hat happened in the UK and US…..

For lawyers, its a good time to specialise in bankruptcy law….

Yang
Yang

The govt insolvency department is clearing all bankruptcy cases that are more than 5 years.

Tigerz67
Tigerz67

I think as long as you have a job and manage your debt properly, its OK. One of the key factors in the Eurozone and US crisis was the high unemployment rate into those countries.
But I think Bank Negara needs to proactively curb debt especially personal loans (or bad debt).
The government have to spend less or make more money (GST, reduce subsidy, higher tax) which do you think will happen.

semuanya OK kot
semuanya OK kot

What is the overall debt % for all sectors including GLCs? We seem to be approaching the levels of Greece. Japan is far worse, but an exception because as a nation, they have proven repeatedly that they can overcome the biggest catalysms and apocalypses.

Of course, we must not discuss tuan USA, the world’s biggest debtor, because different rules apply. Part of the reason the debt of many nations is climbing, apart from sheer corruption and incompetence, is the rules of international finance and trade.

Don Anamalai
Don Anamalai

As at last year, the companies owned by Tan Sri Syed Mokhtar Al-Bukhary have accrued by a combined debt of RM34.3 billion, more than 10% of the national corporate debt.

Remember the Renong Group bail out by BN of the during the financial crisis in 1997?
Deja vu once again?

Yang
Yang

If you think Penang govt affordable houses from 72k – 400k is expensive think about this.

PRIMA 1 Malaysia low cost house in Sabah major towns such as Tawau, Sandakan, Kota Kinabalu and Lahad Datu, unit prices ranging from RM150,000 to RM400,000. Sabah is ulu with a small population and has lots of land and yet houses is as expensive as in Penang.

Didn`t I say the 1 Malaysia is all a bluff.
Now Najib has come up with endless possibilities for you.
You will end up with endless hope.

http://www.propertyguru.com.my/en/property-news/2013/8/10577/Sabah%20home%20prices%20still%20cheap:%20SHAREDA?utm_source=pgmy-newsalert&utm_medium=edm&utm_campaign=dailynews-23Aug2013&utm_content=links

Don Anamalai
Don Anamalai

1Malaysia is now talking about ‘endless possibilities’.
So the price of PR1MA has all kinds of possibilities?

LimKokWing will soon come up with a creative brown-nosing theme song to score point with the new slogan?

Hanzo
Hanzo

Interesting poll currently on-going on Yahoo:

Should Malaysians attend Bersih 4.0 if Ambiga calls for it?

73 % – Yes
6,436 votes

27 % – No
2,410 votes

Penangkia
Penangkia

A lot of Penang apartments and condominiums are owned by foreigners. So when the economy crisis those countries, the first thing people do is to liquidate their non-essential assets – their holiday properties. So my bet is Penang apartments / condominiums will get a lot cheaper if the crisis worsens. Be ready if you are looking for one, and that’s if the crisis is not affecting you.

Robert
Robert
Curious no comments on Moody’s unchanged rating advisory on Malaysia. Also dont forget Japan has a much higher debt ratio, not that we are in the same category as Japan. The reason that BNM has allowed debt to climb to this level is that the belief that with economic recovery, our economy and our people will earn their way out of trouble. I expect BNM to tighten credit as the economic recovery continues starting towards the end of this year with higher BLR (cost of borrowing) and in 24 months with much higher rates, peaking in 2017/8. Wager over a… Read more »
Phua Kai Lit
Phua Kai Lit

Take a look at this video :

http://topdocumentaryfilms.com/lifting-the-veil/

(Comment on the video: it’s the same
everywhere – USA under Obama, Malaysia under UMNO Baru-BN, UK under David Cameron.
The decent majority must mobilise against kleptocracy, plutocracy, oligarchy, divide-and-rule
tactics of those in power).

TS Wong
TS Wong
If you think this is bad, you’re right. Im about turning 55 yrs next Yr and looking forward withdrawing all my EPF savings due to out of job, supporting my children study too. And EPF considering extending withdrawal age 60!! What rubbish is this people talking! I wish the Gov’t consider giving us choices so to determine what we do with our money. By 60 Yrs, My family and I could be in higher debts, so whats the use of savings till 60? Can the Gov’t have hearts and brains to be kind to citizen like me? Its heart sick… Read more »
Ho Siew Kut
Ho Siew Kut
BN people like to tell us that Singaporean household debt is equally high. But please remember that 95% of Singaporeans live in government HDB flat, and they finance bulk of the purchase the HDB with their CPF (like our EPF) money. In other words, they borrow money from the commercial bank and pay their loan instalment via monthly deduction from the Ordinary Account of their CPF. Effectively they are borrowing their own money! So it is a safe investment so long as they are employed (and get employers’ contribution to their CPF) and the HDB flat bought from the government… Read more »
limko
limko

Even if the bubble is burst, it is those who borrowed a lot to buy inflated priced properties that are going to suffer, they are going to stare at a negatively value asset which will not be enough to cover their mortgage if they sell.
As for the developers, and seasoned speculators, they would have collected their profits and sipping champagne then.

Sia Boey Kia
Sia Boey Kia

We have a useless Penang gomen dreaming of cosmopolitan Penang as a bin chooi achievement but boh chap gua lang ke si.
Developers and speculators nightly yam seng to tokong in Komtar Tower.
Penang beh tua liao.

mark
mark

What do these mean? It can mean only one thing-the people are getting poorer(bcos the govt gets more indebted). The rich and the privileged(politically connected) will get richer. It will come to a stage where we can see a great contrast(economically) amongst the population.
Malaysia are not backed by strong financials-foreign reserves and strong currency.There is a lot of drainage of govt funds,productivities and talent pools are lacking.Added to that there are these religious bigots that caused unnecessary tensions in the country and slowing down economic progress.

Yang
Yang
Yes the rich are getting richer. They buy a plot of land for RM3235 per sq ft above the average price of 400-600 per sq ft in most prime areas in Penang, KL and Johore. Now the owners of land and properties in Penang, KL, Johore and in Malaysia are telling the world, its RM3235 per sq ft. So my RM400 per sq ft in Penang is cheap. Hahaha so will not sell until at least RM1,000/=. You see this is how the rich speculators and developers are squeezing the poor. They are creating a virtual market value. And these… Read more »
Yang
Yang
Price will go down and there will be a bubble has been said since last 2 year. I don`t think it will happen. First of all there are no medium cost (MC)house up to 400k being built in the market. There are some LMC and LC units being built but these are usually being compensated to the squatters leaving a few for the perumahaan dept to be distributed among the over 50k applicants. This will means that beside the 50k perumahaan applicants waiting in line, there are another 50k people (those earning 3k – 6k) whose income make them not… Read more »
tan, tanjung bungah
tan, tanjung bungah

Hi everyone,
We were given a very ‘rosy’ picture of the state of economy by UMNO Baru and BN prior to the 13 GE! All sorts of additional cash subsidies, most infamous were the BRIMs, with an eye on winning the 13GE, gifted without a care of consequences after the 13GE!

Now, we are facing the harsh reality that not all is right, in fact the people are going to be hit hard very soon! Only on last Monday, I had to face the worst exchange rate of RM2.613 = SGD1, the highest rate I had ever faced!

bigjoe99
The household debt problem will not be a problem so long as there is no severe downturn. But if the govt loosen consumer credit to avoid a slowing economy, god knows what will happen.. The govt debt is not that worrying given that taxes is relatively low and savings are high..The problem is once we let the govt raise taxes and remove subsidies, there is no longer any buffer i.e., reserves should THAT also get spend away and we are not on a track to surplus.. If taxes are raised and subsidies are remove and credit loosen too much now… Read more »
Datin Sri
Datin Sri

Government should raise higher taxes on super rich not via GST that will hurt those earning less than RM3K/mth. Otherwise where to seek fund for BR1M next year ?

human cost that has never been seen before in this country ? how about those fatal shootings and many many GRO vices ???

Yang
Yang

On the contrary the govt is pushing all the taxes towards the poor people. GST will hurt most wage earners whether 3k or 6k. What is 6-7k nowadays. House loan & service charges 1400, Car loan – 600, Insurance 500, Petrol per month – 400, Electricity & water – 300, Child day care 1 child – 600, Its already 3800 not counting food and other miscellaneous expenses.

Datin Sri
Datin Sri

Anil like us is very con concerned. don’t believe can read more worrying statistics here :

Household debt has risen by 12.7% since 2008, but GDP has only grown at a rate of less than half of that. In fact, GDP growth was 5.1% in 2012, in comparison to an annual growth of 12% for household debt recorded for 2012.

EPF’s numbers themselves are less than encouraging for those who have little to spare for savings: in their 2012 annual report, 85.2% of those who contributed to EPF had less than RM 100,000 in their accounts.

http://www.kinibiz.com/story/quotes/44119/malaysia%E2%80%99s-household-debt-situation-2.html

Yang
Yang
With bank increase in interest rates, the people will now have to pay more for their housing loan. Increase in essential goods, oil, electricity etc etc etc tariff will make the poor approach the Ah Long and make their household debt even higher. There will be more robbery, cheating and lawlessness with the people unable to cope with their SHRINKING ringgit. The scenarios will be even worse with the implementation of GST which will be from 4% – 7%. India may face a financial crisis like what happen to Thailand in 1997. If that happen, let us brace to tighten… Read more »
Don Anamalai
Don Anamalai

Has your electricity bill increased since the new digital meter installation?
Do you want to know the root cause of this sudden increase?

If you think you have been unreasonably charged by TNB, share your story and sign the petition here:

http://www.checkyourtnbmeter.com/

najib manaukau
Surely, Nil, surely you have heard of stories of the rich or very rich going bankrupt because they never watch their expenses ? Or they have very incompetent financial advisers to take the blame in the event of their failures. The egregious Mahathir has even the audacity to admit he was a spendthrift but how could he had been able to accumulate (his wealth) without them ? He must think all of are morons without the brain to think and to judge what he was up to. He tries to put the blame on AB, a colleague of his for… Read more »
Priyanka
Priyanka

YES, many share the same worries about the figures you just quoted. However, many still fancy good days ahead with the promised transformation by the government that now depend heavily on domestic consumption to sustain Bank Negara’s 4-5% GDP growth when foreign investors pulling out from equities leaving KLSE short in breath panting for more air last few days.
Just read between lines about Idris Jala’s thoughts on MAS and we should know where we are heading.

Priyanka
Priyanka

PM Najib just said Endless Possibilibilites as new tagline. So possible for bubbles to burst and fire lelong sale of hyped-up properties in KL & Penang my be endless. Be warned.

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