Further burden on working class and young people
In the middle of preparations to celebrate the Eid festival, Malaysia’s share and currency values were badly hit by news that Fitch’s had downgraded Malaysia’s credit status - from ‘stable’ to ‘negative’. The news immediately affected the Kuala Lumpur Composite Index (KLCI) which covers Malaysia’s 30 largest companies; it sank 1.3%, to the lowest point in seven weeks. The Malaysian currency dropped to RM 3.25 to 1 USD - a three year low and a 15 year low against the Singapore dollar.
Earlier, the Malaysian Institute of Economic Research (Mier) had revised downwards Malaysia’s economic growth forecast to 4.8% for this year from the 5.6% estimated earlier. It said, “The lower growth projection was due to external factors such as a weak global recovery, China’s economic slowdown, moderate expansion in Asean (Association of Southeast Asian Nations), financial market volatility and the tightening of financial conditions…somehow, our engine of growth in the external sector is slowing down. Our exports are declining quite substantially, especially in April and May, while the trade balance is very small”.