Prime Minister Datuk Seri Najib Razak, who is also Finance Minister, unveiled 2015 budgets in the Parliaments on Friday, 10th October 2014. The theme for 2015 Budget “Accelerating Growth, Ensuring Fiscal Sustainability and Prospering the Rakyat.”

In 2015, economic growth is expected to remain strong between 5% and 6% while the fiscal deficit is projected to further decline to 3% of GDP.

The 2015 budget is formulated with focus on the people’s economy and outlines seven main strategies:

First Strategy: Strengthening Economic Growth;

Second Strategy: Enhancing Fiscal Governance;

Third Strategy: Developing Human Capital and Entrepreneurship;

Fourth Strategy: Advancing Bumiputera Agenda;

Fifth Strategy: Upholding Role of Women;

Sixth Strategy: Developing National Youth Transformation Programme; and

Seventh Strategy: Prioritising Well-Being of the Rakyat.

The following are 2014 Budget highlights for Personal Finance and Investment.

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“We are going bankrupt in five years time”

“The government has no more money and we have RM500 billion of debt”

“Mismanagement and Corruption has made us poorer”

These are the routine statements you may have heard regarding the state of the Malaysian government finances.  But do they hold any water?

A while back, in Book 3 of the 259 Trillion Vs 5 Trillion Series, my co-author and I have presented the calculations of the US Government assets and compared them to the so called “mountain of debts” and found out that the opposite was the truth, that the US has far more asset than debt.  People with their own agenda use half-baked statistics to propel “unsuspecting” citizens to become angry and extremely emotional toward their own governments, masking their true intention, which is mostly for power grabs.  As such, with such roaring emotional outburst of various camps on small issues, I will try to dispel a few myths on the Government of Malaysia.  One should view things with brains and facts and not on sensationalized half-truths and emotion.

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Recently, one of my friend published a very interesting 3-books-series called “259 Trillion vs 5 Trillion”. I invited him to post an article “What will Happen if Gold is Used as Money?” last December.

The books aim to describe the workings of our economy, banking system and paper money. It contains a lot of illustrations, charts and detail explanations. He is not an economist by education (in fact, he is an engineer!). As such, he tried to explain the details in a very easy manner so that it can be easily understood by anyone.

By knowing him for a few years, I can say that he has depth knowledge in the subject he presented in his book series. The titles of the book series are,

1. The Conundrum of Assets And Money (published in November 2011)
2. Paper Money and the Banking System in Action (published in December 2011)
3. (Will be published in February 2012)

Below are the books summary

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Currently, there are three (3) major credit rating agencies in the world. They are Fitch Ratings, Moody’s & Standard & Poor’s.  Fitch Ratings & Standard & Poor’s are using the same scale from AAA to D which first introduced in 1924.

S&P credit ratings are the agency’s forward-looking opinions about credit risk. It measures about the ability and willingness of an issuer, such as government, to meet its financial obligations in full and on time.

The ratings are based on analysis on economic and financial condition and as well as financial history of borrowing and repayment

Credit ratings are important for countries as they seek international funding for development and any downgrade would mean higher borrowing costs. For the investors, credit ratings is used in making investment decisions.

The table below is the S&P credit rating scale and it’ s definitions.

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