Surviving G4's Crisis Measures

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The present crisis affecting the world – and Malaysia – has complex origins. What is clear is that the measures that G4 nations are taking to pull themselves out of their troubles will affect small players profoundly. What should Malaysia do?

Policies in G4 countries (the US, Europe, Japan and the UK) are likely to shape economic strategies and the global economic environment for years to come. Their central banks have embarked on economic and monetary paths that will collectively cause:

  • higher liquidity in the markets and increased expectations of higher inflation in the future;
  • higher market volatility;
  • stealthy competitive currency devaluation; and
  • greater asset price increases and wider inequality.

Before delving into the implications these have for Malaysia, it is pertinent to understand how the world came to be in such a position.

US fiscal deficits and the political paralysis in tackling public debt


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