PKR National Supreme Council Member cum PKR Sabah Secretary – Dr Roland Chia is saddened by the brutal fact that Malaysians are losing the battle with household debts. It is a fact that Malaysians have a high household debt of 76% of Gross domestic product (GDP).
If this dangerous trends were to continue , should there be an economic slowdown or recession, many Malaysian households would be hit and the impact on financial institution would be devastating also.
Despite the Household Income Survey 2012 shows that there is reduction of poverty rate and increase of household income for the average Malaysians, Malaysians are still finding hard to cope with spiraling cost of living , increase in debt and lack of disposable income to spend on.
According to Bank Negara, household loans for residential properties in January 2013 jumped 42.4% compared to decline of 0.3% in December 2012. Credit card debt, which had been declining from October to December 2012 rose by 28.6% in January 2013.
The escalating property prices throughout the country Malaysia have also resulted in Malaysians have to take out higher loans. Another alarming fact is that personal loans which went up by 73.4% in January 2013 against a decline of 2.9%.
Malaysians have also borrowed heavily to buy securities as loans – it was recorded a rise by 85.1% compared to 10.7% in December.
On a consumer point of view, many Malaysians spend more that they earn .The sad truth is also that now Malaysians are trapped in increasing debt as reflected in higher personal loan and credit card debt. Many have already turned to illegal money lenders or pawnshops.
Rising of car and property prices must be contained as for a typical household, loan repayment for a car and home can swallow 50% of a borrower’s monthly wage. Prices of homes and cars are rising faster than income levels. A long term solution must be found before the household debt burden on the economy becomes untenable.
These should not have happened to Malaysians given the fact that our country is rich with vast resources of oil, gas, timber, palm oil and vast parcel of land with just 28 million of Malaysians. Finally, the rakyat must resolve to do much soul searching- after 50 years of independence in this forthcoming 13th General Election in Sabah & Malaysia through the ballot box.