Wednesday, 3 July 2013

CIMB Malaysian Economic News - 03 July 2013

At this times, the ministry is not planning to decrease excise duty on imported cars as a mechanism to lower car prices, said Deputy International Trade and Industry Minister Datuk Hamim Samuri. He added that the government will lose up to RM7bn a year in revenue if it cuts down on excise duty on imported cars. The decrease of this proceeds could limit the government's ability to provide the basic needs of the citizens, he said. (Financial Daily)

 The national broadband coverage is now at 66.7%, a significant improvement from 21.8% in 2008, the Dewan Rakyat sitting was informed Tuesday. Communication and Multimedia deputy minister Datuk Jailani Johari noted that Kuala Lumpur enjoyed the highest coverage at 107.5%. Negeri Sembilan recorded an average of 74.4%, Putrajaya (80.9%), Penang (97.7%) and Selangor (76.9%), he said. (Bernama)

Poor financial planning and living beyond one's means are among the main factors for debt and inability to repay loans, said Credit Counselling and Debt Management Agency (CCDMA) CEO, Koid Swee Lian. Out of 90,807 borrowers helped by the agency under the Debt Management Programme (DMP) from 2007 to 31 May this year, she said 20,886 or 23% had poor financial planning.

  • Some 18,161 or 20% were in debt due to high medical expenses, others (17,253 or 19%), business problems or failure (13,621 or 15%), failure to control credit card usage (9,989 or 11%), loss of employment (9,081 or 10%), and death or loss of source of income or failure in investment (908 or 1% each). 
  • During the same period, a total of 222,942 borrowers sought counselling from CCDMA but only 90,807 joined our programme, she said. 
  • Until 31 May, 3,591 borrowers managed to get out of debt, with a total of RM130.05m in debts paid up. (Bernama)
Bank Negara Malaysia (BNM) is looking to reduce the production of new RM1 and RM5 banknotes for festive seasons in phases starting this Hari Raya Aidilfitri. Its Assistant Governor Norzila Abdul Aziz said BNM will recycle fit banknotes of the RM1 and RM5 dominations to conserve the environment.

  • Every year BNM issues about 750m pieces of new RM1 and RM5 banknotes to meet the seasonal demand. 
  • However, about 70% of the issued banknotes are not required for normal payment transactions. 
  • These banknotes are returned as deposits soon after the festive season resulting in the accumulation of excess RM1 and RM5 banknotes at BNM. 
  • The printing of an additional 500m pieces to meet the festive demand results in high costs and demands on resources. (Bernama, BNM)

Malaysia's economic growth is expected to improve in the second half over the first half, spurred by the on-going Economic Transformation Programme (ETP) projects which will jack up other economic activities. Minister in the Prime Minister's Department Datuk Seri Abdul Wahid Omar said the government is still sticking to a range of 5-6% for GDP growth this year. On household debt, which surpassed 80% of GDP in 2012, he said people should start to live within their means. (Bernama)

Source: CIMB Daybreak - 03 July 2013

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