Falling Oil Prices - Where it leaves Malaysia

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Falling Oil Prices - Where it leaves Malaysia, Not too bad afterall

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TSMETALRAGE	Jan 14 2015, 06:53 PM, updated 11y ago Return to original view \| Post #1
Casual Junior Member 448 posts Joined: Jan 2003	With the air of uncertainty being felt as a result of falling oil prices, i'd like to share this very well explained article below. i couldn't copy and paste some of the tables and figures because they are images. but you can visit the link to view in its original form. Basically, the summary of it is: 1) Malaysia is actually (MOST SHOCKING REVELATION) a net importer of crude oil 2) Economy will shrink overall on low oil prices, but felt unevenly 3) Government revenue will fall, but it's not as high impact as it could be for reasons explained inside the write up 4) Good news is that the balance of trade could move in Malaysia's favor 5) And inflation is kept in check Let's hope things will not be so bad for us in 2015. » Click to show Spoiler - click again to hide... « What Falling Oil Prices Means for Malaysians So, oil prices are falling drastically and you’re not sure how to feel about it. What was USD110 per barrel of oil in June 2014 is now trading under USD50 per barrel. On one hand, Yay! Cheaper gas! Cheaper flights! Lower inflation! What’s not to like about it? But on the macro side, you’ve also heard some pretty scary things about Malaysia’s future. Like how falling oil prices could bankrupt us, or lead to a recession. But it’s all so difficult to understand. Are we or are we not supposed to be happy about falling oil prices? If you’re feeling uncertain, fret not. We’ve come up with a layman’s explanation of what will likely happen to Malaysia if oil prices continue to stay low. Admittedly, it’s not the easiest thing to understand. But by the time you’ve finished reading this, you would have gotten a good grasp on subjects spanning economics, federal budgets, and Malaysia’s role in the global oil trade that you can use to impress your friends with. Malaysia – A Net Oil Exporter / Importer? Net oil exporting countries stand to gain whenever oil prices are high. Conversely, low oil prices hurt them. The common wisdom heard is that Malaysia is a net oil exporter. If you put 2 and 2 together, we can understand why you’re worried. - See more at: http://loanstreet.com.my/learning-centre/f...h.EKoaBu6W.dpuf Original Source: Falling oil prices and its effect on Malaysia This post has been edited by METALRAGE: Jan 14 2015, 07:03 PM
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TSMETALRAGE	Jan 15 2015, 09:14 AM Return to original view \| Post #2
Casual Junior Member 448 posts Joined: Jan 2003	Things will be tough going into 2015 for sure. What the article has shown is illuminate the various moving parts affected by falling oil prices, and is not a commentary piece on the entire economy as a whole when all factors are taken together (gst, new potential taxes which aren't even here yet, subsidies unrelated to petro dollar which would have been there in the first place) etc. Ceteris paribus.
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TSMETALRAGE	Jan 15 2015, 11:57 AM Return to original view \| Post #3
Casual Junior Member 448 posts Joined: Jan 2003	QUOTE(askwhy @ Jan 15 2015, 09:39 AM) how about our onemdb? what the effect to malaysian ? QUOTE(BillySteel @ Jan 15 2015, 10:04 AM) If 1MDB fails the gov is in shit. And lets not forget the second storm brewing with PFI which is under the ministry of finance. Although the government did insure only 5bil of the loan lets not forget the cascading effect of a default at that size. Back to oil.....didnt najib say he was going to revise the budget. I was kinda sceptical when dreamer first said the ship is sinking....now i am probably in the lifeboat with him on this.....this week another 200mil gone from the markets. Good thing i brought usd since foresaw impending doom anyway. Malaysia relied to much on black gold......now that black gold is cheap taxpayers will be first to pay the price....second the consumers. Malaysia should serve as a example on how to save your money for rainy days and not spend like you own the world. inefficient public spending and abuse of office is a constant whether or not oil prices are high or low. 1MDB, PFI, PKFZ, BR1M, Youth Car Scheme, white elephant projects, these are issues and expenditures that most people are unhappy about, but have nothing to do with oil prices. discretionary expenditures are a function of total govt revenue, regardless if it came from oil or gst or dug out of the gold ore of the rakyat's noses in critical thinking, one should have the ability to separate one issue from another to assess each merit unto itself. oil prices are ONLY ONE of the levers on our economy. i started this discussion to objectively assess the impact of falling oil prices on Malaysia which also seems to be the point of that article. i believe the article got all the moving parts correct, some of which are not immediately obvious to joe public. there is already enough avenues to vent your frustrations on our administration as well as debate the direction of our entire economy on a whole try not to bring in unrelated issues to murk an objective discussion. it greatly helps the quality of the discussion
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