...Executive Summary Overnight rate is the target rate for the daily liquidity operations of the central banks and a signaling device to point out monetary policy position. The main purpose of this report is to discussion the history overnight rate in Malaysia and predicts the coming overnight rate this year. From 2004 until 2010, Malaysia’ overnight rate reaching an historical high of 3.50 percent in April of 2006 because the Bank Negara Malaysia need to stem the outflow of money and cool inflation pressures to ensure that Malaysia continues to have sustainable economic growth in an environment of price stability. Moreover, a record low of 2.00 percent in February of 2009 because a worldwide economic meltdown due the European sovereign debt crisis. Besides, the coming overnight rates that we predict will remain at 3.0 percent this year because the inflation had continued to increase mainly due to higher food and fuel prices 1.0 Introduction Overnight rate is the target rate for the daily liquidity operations of the central banks and a signaling device to point out monetary policy position. It is also the main tool for evaluating and examining liquidity conditions since it is very sensitive to illiquid conditions. And overnight rate is the interest rate that banks charge to another bank for lending immediately available funds overnight. At the end of a business day, banks usually end up with a deficit or surplus funds and based on the funds on hand, banks will determine...
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...Page INTRODUCTION 2 Economic growth and living standards in Malaysia. 3 -7 Unemployment in Malaysia 7 - 10 Inflation in Malaysia 10 - 12 Summary 13 References 13 -14 1. Introduction Macroeconomics can be best understood in contrast to microeconomics which considers the decisions made at the level of a specific subgroups or individuals. Macroeconomics considers the behavior of an economy at the aggregate level or how all of these decisions sum together. It looks at the bigger picture and involves the study of the economy as a whole. More specifically, it is a study of national economies and the determination of national income. The study of macroeconomics are focusing on several factors that are: * Real output – determine the reason of the economic growth and their differences between various countries. * Productivity – the average labour productivity. * Economic growth – causes of decline and growth. * Unemployment – types, reason and how to overcome it. * Inflation – Causes, reason of different rate either from time to time and from one country to another. In order to greasing the engine of the economy, government used several policies such as: * Financial or monetary policies to influences supply of...
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...important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. The organization's marketing environment is made up of: 1. The internal environment e.g. staff (or internal customers), office technology, wages and finance, etc. 2. The micro-environment e.g. our external customers, agents and distributors, suppliers, our competitors, etc. 3. The macro-environment e.g. Political (and legal) forces, Economic forces, Sociocultural forces, and Technological forces. These are known as PEST factors. Political Factors. The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. You must consider issues such as: 1. 1.How stable is the political environment? 2. 2.Will government policy influence laws that regulate or tax your business? 3. 3.What is the government's position on marketing ethics? 4. What is the government's policy on the economy? 5. Does the government have a view on culture and religion? 6. Is the government involved in trading agreements such as EU, NAFTA, ASEAN, or others? 7. Economic Factors. Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. You need to look at: 1. Interest rates. 2. The level of inflation Employment level per capita...
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...INTRODUCTION The objective of this mini project is the study the structure and performance of national economies and the policies that governments use to try to affect economic performance. Important topics in this mini project include the determinants of long-run economic growth, unemployment, inflation, and macroeconomic policy. In addition, this mini project are also able us to know the measurement of the standard living of a country in term of productivity, efficiency and effectiveness. Besides that, we are also able to determine what is measured by Gross Domestic Product, Inflation and etc as well as know how the government policy could contribute to improved productivity of the country. The picture below shows the brief idea how does Indonesia looks like. Picture 1: Tourism in Indonesia’s island Picture 2: Place to travel in Indonesia Picture 3: City in Indonesia Picture 4: Map of Indonesia Choose one country of the world The chosen country was Indonesia. The reason of Indonesia been chosen because Indonesia is given public an image that Indonesia is a lag behind country than other since there was a tragic event happened in Indonesia in the middle of 1997 all along. This causing Indonesian suffered a great deal and many of them have experienced a very large decline in their living standard. It was irony in Indonesia’s case seen a country...
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...Bank Negara holds off raising rates By IZWAN IDRIS PETALING JAYA: Bank Negara kept the overnight policy rate unchanged yesterday despite the pressure to rein in rising prices, as policymakers placed priority on sustaining economic growth. “While both the risks to higher inflation and the risks to slower growth have increased, the immediate concern is to avoid a fundamental economic slowdown that would involve higher unemployment,'' the central bank said in a statement issued after a scheduled monetary policy meeting. Bank Negara was originally expected to announce the meeting's outcome at 6pm yesterday, but the announcement was delayed by nearly two hours. Earlier, the market was split almost evenly on how they expected the central bank would deal with rising inflation in the country. The interest rate in Malaysia has remained at 3.5% since April 2006, and is among the lowest in Asia together with those in Hong Kong and Thailand. The consumer price index (CPI) jumped to a 26-year high of 7.7% in June – or twice as high as 3.8% in May – as transport costs soared after the Government raised petrol and diesel prices at local pumps by 41% and 63% respectively. Bank Negara said it expected inflation to remain “elevated in the second half of the year and into early next year before moderating towards the middle of 2009.” “The average inflation for 2008 is projected to be in the range of 5.5% to 6%,'' it said. That is higher than the bank's earlier forecast of around 4%...
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...student’s own handwriting.) I hereby declare that all group members’ names are correctly included in the above section. I hold a copy of this assignment which I can produce if the original is lost or damaged. I certify that no part of this assignment has been copied from any other student’s work or from any other source except where due acknowledgement is made in the assignment. Group leader’s signature : _____________________________ Group leader’s name : _____________________________ Group leader’s student ID : _____________________________ Date : _____________________________ Question 5 Malaysia inflation jumps as government feels heat over living costs January 22, 2014 KUALA LUMPUR, Jan 22 — Malaysia’s inflation rate jumped in December, exacerbating a political headache for the government over rising living costs and increasing the chances of an early hike in interest rates this year that could further dampen consumer sentiment. The statistics department said today that the consumer price index rose to 3.2 per cent from 2.9 per cent in November, the highest level since November 2011 and up from 1.2 per cent a year earlier. A Reuters poll had forecast it would pick up to 3.1 per cent. Faster price rises are partly a result of a series of subsidy cuts introduced by Prime Minister Najib Razak’s...
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...environmental forces that is beyond the company planned and performance. It could not be controlled or adjustable. The segmentation of the macro environment is according to the six factors of the PESTEL analysis. In this task given, we only required to discuss the social and economic key element based on the PESTEL analysis. Based on the researched, analyzed and evaluation made upon the social factor, it is clearly stated that any automobile industry would certainly have their net profit if they were to continue investing here to newly invest as the social environment has reached its stability level. This proportionally shown in the economy field as well, as the country gross domestic product is increasing, low unemployment rate, low inflation rate but high interest rate sets Malaysia a stable economical country, which then indirectly imply a...
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... 9 1.5 General operations of GST 10 1.5.1 Goods and Services Tax (Zero-rated supply) Order 2014 11 1.5.2 Goods and Services Tax (Exempt supply) Order 2014 132. Content 14 2.1 Effect of implementation of Goods Services Taxes (GST) in Malaysia 14 2.1.1 GST are regressive tax or progressive tax? 14 2.1.2 Effect of implementation of GST on inflation based on CPI 16 2.1.3 Effect of implementation of GST on the household income 19 2.2. Impact of GST on sub regions of Malaysia 24 2.2.1 How GST improve the standard of living 29 2.3. The implementation of GST in other ASEAN Countries 303. Implication Of Implementing GST On Economy...
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...such as unemployment, inflation, economic growth, money supply, budget deficits, and exchange rates. The knowledge from this study will indicate the ‘health’ condition of economy in the country. As a business owner, the study of the macroeconomics is very important to make everyday business decisions as they have to focus beyond what is happening in the firm and look into aggregate demand and aggregate supply in economy. Managers always need information or knowledge to make decisions. Example is demand theory. If people get low income, they tend to spend less than when they are getting higher income. As the managers are forecasting the demand for their products and services, anticipation of how consumers’ incomes will grow should be learned. To make decisions, business owner should also know about the current interest rates for loans if they are about to borrow money from the financial institution. They should also be aware about where they stand in the business cycle. Cost of labour is another important reason to study of macroeconomic in order to make better decision. For example, during tight labour supply, the price or salary of the labour will shooting up and this will eventually increase the price of the product in the market. Business owner might consider other option to solve these issues. Examples are outsourcing the production or services to cheaper country or to other specialized company so that they don’t have to hire expertise with high salary and keep maintaining...
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...girls with the basic job skill, education and bring them back into a real society. Date established 1991 Listed in SGX 2000 Corporate HQ & Factory United State Manufacturing Location New York Canada London Japan Korea. Major Market United state Europe Asia Australia SWOT Analyze Strengths * Worldwide recognition by famous makeup artists, celebrities , bloggers and magazine editors. * High quality of the products built a very good market reputation and loyalty. * With all experienced and certified makeup artists as their brand consultants, it is always satisfied customer needs and built confident to the brand. Weakness * Lack of advertising - It is unfavorable to the company. * Limitation of products - Certain products only carried in US and Europe markets only * High turnover rate in South East Asia – It’s indirectly affected the company market performance. * Markets decline - Singapore and Malaysia markets are decline in these recent years....
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...Implementing Goods and Services Tax in Malaysia Lim Kim-Hwa Penang Institute & University of Cambridge limkimhwa@penanginstitute.org Ooi Pei Qi Penang Institute peiqi.ooi@penanginstitute.org 8 October 2013 Abstract External economic factors and Malaysia’s domestic fiscal position dictate that the Goods and Services Tax (GST) is likely to be introduced in the upcoming Budget 2014. In this paper, we: 1) assess if GST is a progressive or regressive tax; 2) study the impact of GST on Malaysian households; 3) estimate the total GST raised from households in perfect condition vs. practical circumstance; 4) estimate the expected inflation spike based on the Consumer Price Index; and 5) discuss the wider implications of implementing GST. Despite setting essential items like basic food, public transportation, education and healthcare as exempt or zero rated items, we show that GST is a regressive tax. Using 7% as the standard GST rate, the average household is expected to pay 2.93% of monthly income as GST (RM 104 per month in July 2013 values). Households will pay higher percentage of their income as GST if they are: middle and low income groups (with those earning around RM 2,500 per month paying 3.07%), engaged as technicians, clerical and services workers, farmers and fishermen, in single person household, in young households (less than 24 years old), Bumiputera-led households and households residing in Peninsular Malaysia. We find that it is not possible...
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...Introduction The idea of introducing a flat consumption based Goods and Services Tax (GST) in Malaysia has been floated since 1989. It now seems as though this may become a reality in the 2014 Budget, with implementation beginning within 18 to 24 months at an initial rate of 4 % on the supply chain. The plan to overhaul the tax system has begun to gain momentum as the government deals with an increasingly weak economic outlook, combined with global uncertainty. While not at the emergency levels of many advanced Western European economies, Malaysia has not run a structural budget surplus since the Asian Financial Crisis hit in 1997. Federal government debt as a percentage of Gross Domestic Product (GDP) currently sits at 55.4 %.1 For the time being, this is manageable, but it is the government’s ability to reign this spending in, as well as lack of budgetary reform that has led ratings agency Fitch to downgrade Malaysia’s credit outlook to negative this year. The government’s recent 20 sen cut to the fuel subsidy and increasing speculation of a GST framework to be included in the upcoming budget can be seen as evidence that they are trying to remedy both structural and cyclical economic challenges. Furthermore, for far too long there has been an overdependence on the revenue generated from oil and gas dividends, which currently account for over a third of total government revenues. 2 A GST offers a single unified system where the tax burden is equally shared between the services...
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...transport equipment. The THREE (3) ways on how the economy can reduce imports are as follow: 1) Import Substitution Policy Import substitution policy is a policy that promotes the replacement of foreign imports with domestic production. By implementing this policy, Malaysia attempts to reduce its foreign dependency through the local production of industrialised products until they reach a level of development when they are able to compete in the global market (Wikipedia 2013). According to Lee (2005), this type of industrial policy accompanied by tariff protection, import restrictions and sometimes government procurement favouring locally produced products is targeted at government investments such as Proton (car) and Perwaja (steel). Another long-term solution for import substitution policy is through encouragement of Foreign Direct Investment (FDI) in Malaysia. Malaysia is a politically stable nation with good legal system, well-developed infrastructure, abundance of workforce and has attractive incentives for investors (Chakra 2009). FDI in Malaysia will boost Malaysia’s capital market, enabling Malaysia to acquire up-to-date technology and skills that will grow our domestic industrial market. 2) Exchange Rate Policy Government can affect the domestic output and prices by...
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...THE PERCEPTION OF TAXPAYERS TOWARD GOODS AND SERVICES TAX (GST) IMPLEMENTATION IN MALAYSIA CHAPTER ONE - INTRODUCTION 1.1 Backgroud of Study Malaysian taxation system is generally divided into two, which are direct taxes and indirect taxes. Indirect taxes are controlled by the Royal Malaysian Custom Department (RMCD) and it consists of four components such as excise duties, customs duty, sales tax and service tax. Direct taxes are under the control of the Inland Revenue Board of Malaysia (IRBM). The IRBM is responsible for all policies relating to direct taxes such as income tax of individual and business, petroleum income tax, real property expansions tax, and stamp duty. From the government perception, taxation is a vital economic tool because it can be employed to regulate the economy, to invigorate economic growth through the granting of fiscal incentives as a principal aim of implementing tax policies and to provide funds for development projects (JeyapalanKasipillai, 2005). The contribution of direct taxes and indirect taxes to government revenue in 2009 amounted to RM78.375 billion (49.4%) and RM28.129 billion (1 7.73%), respectively. This shows that taxation contributes more than 60% to the Malaysian government revenue. Recently, the Malaysian government established the implementation of goods and services tax (GST) to replace Sales Tax and Services Tax (SST). The GST plan was first raised in 1988 but at the time it was considered unnecessary because the sales...
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...INTRODUCTION The term "inflation" originally referred to an increase in the amount of money in circulation. Most economists today use the term "inflation" to refer to a rise in the price level. Rising in price and increase in money supply is two different meanings. The increases of money supply can also being called as monetary inflation while rising in price as price inflation. Economists generally agree that in the long run, inflation is caused by increases in the money supply. However, in the short and medium term, inflation is largely dependent on supply and demand pressures in the economy. In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects erosion in the purchasing power of money or in other word a loss of real value in the internal medium of exchange and unit of account in the economy. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time. 2.0 THE EXISTENCE OF INFLATION AND HOW IT MEASURED In order to know whether the existence of inflation, we must analyze the demand supply curve and see how it can relate to an increase in price. That is if we do believe that any increase in price somehow relates to inflation. An increase in price...
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