Business slowing, yet we are spending more?

I am not speculating over here – this is based on facts and figures from Malaysian Institute of Economic Research. Here’s what happening during Q3 2012: business is generally in contractionary mode. If you are an employee, you know that capex spending is generally tight at this time. There are even rumours of paycut and retrenchment flying around for multinational companies. Now what have you heard recently?

But I got to salute the optimism in fellow Malaysians who are ever ready to spend, especially towards the end of the year. Proof? People around me are getting Samsung S3s and iPhone 5. Not to mention long queue at Tesco on weekends. You name it.

The good to know is that to date (up to Sept 2012) the inflation rate, according to Department of Statistics Malaysia, only hovers around 1.8 percent. This is way lower than the norm of around 3 percent (3.2 percent in 2011)


BCI = Business Condition Index, and CSI = Consumer Sentiment Index


  • BCI dives below threshold to settle at 96.0
  • Flagging sales growth
  • Production drops further as new local and export orders dwindle
  • Capital spending dips sharply
  • Near-term expectation remains dim


  • CSI surges to 118.3 points
  • More bounce in current incomes
  • Financial upgrade and more jobs expected
  • Inflationary anxieties abating
  • Consumers in the mood to spend

Anyway, always use your credit card sparingly – best as purchasing method, not to extend (too much) your purchasing power.  Now on a lighter note – here’s another awesome infographics from the iMoney folks, on what happens in a split 10 seconds time frame every time you swipe your credit card.



  • ChampDog

    Reply Reply 27/10/2012

    Very good article and I like credit card process too. :)

    When company starts to retrench, we can only start seeing the impact or else most of us will still keep spending because we all thought that we have guarantee future money.

    • LCF

      Reply Reply 27/10/2012

      Absolutely Agree Champ!

  • Phil

    Reply Reply 24/10/2012

    Thank you for highlighting & confirming something is wrong somewhere. I noted such strange situation in Malaysia while i am feeling the impact in another country. The global economy actually slowing down esp on countries which depends on China.,Euro & US problem. Reason that i found from newspaper is that inflow of foreign funds and domestic orientated market. I always wonder where does our fellow Malaysians find the money to spend and invest in properties?

    • LCF

      Reply Reply 25/10/2012

      You are welcome Phil. I think people who spend and invest in properties are 2 diff types. The former finds it very easy – one swipe of credit card is all they need. The latter, well, I’d salute those really cash-rich, veteran property investor because they are unaffected regardless of business cycle. Visit and read CK’s article to get what I mean.

  • Wilson

    Reply Reply 24/10/2012

    Sorry, may i know how to calculate the credit card interest charges? How to get the RM158 figure? Sorry for troubling and thanks for the explain in advance if someone going to help me out :)

  • LCF

    Reply Reply 24/10/2012

    Yes, I agree on the debt money part. Like the way you put it – “Gold is the money for the rich, silver is the money for the poor, credit card is the money for slave”. Most people will still spend, until reality strikes.

  • It’s either fellow Malaysians are cash rich (with all the saving in previous years) or spending using debt money. This year pay rise is relatively low for several MNCs that I checked on. SME might be otherwise depending on the industry. Gold is the money for the rich, silver is the money for the poor, credit card is the money for slave. Malaysians are getting heavier and heavier into debt.

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