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Literature Review Financial Crisis

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CHAPTER 2
LITERATURE REVIEW & CONCEPTUAL FRAMEWORK

2.1 Introduction
This chapter will discuss on the literature review in Section 2.2 which explains about the real situation that happens during the financial crisis and the factor that lead to these problems and it will give an explanation on the main focus of our study which is the impact of financial crisis towards the Malaysian citizens in the scope of households. There are a lot of arguments and opinions from financial analysts as well as the expert economists in and outside Malaysia. In Section 2.3, it explains the conceptual framework of the study and theory that will describe the correlation between the factors and impact of the study. Section 2.4 will state the hypothesis for the study …show more content…

The statistic was supported by the Citigroup Incorporation Economist, Kit Wei Zheng. He said that the impact of inflation increased as the result of petrol price effect and the decline of Malaysian …show more content…

The value is not showing a good sign to the domestic market as compared to the same period on the last year. Some economists believe that Goods and Service Tax (GST) is the main cause of inflation. Alliance Research chief economist, Manokaran Mottain, stated that the inflation can accelerate in 3 percent to 4 percent in month-to-month basis due to GST which was implemented in April 2015.

2.2.2 Indebtedness
According to the Bank Negara Malaysia (BNM) Press Statement, the inflation had increased in a long run average which continue to grow the financial instabilities. The micro and macro measures have shown a medium effect towards the growth of the indebtedness to the household. Based from the statistics from Asia-Pacific Banks Charts of the Month, it stated that last year’s household debt is at a high level where the indebtedness is 88 percent from the GDP in Malaysia itself.

In the words of an economist named Dr Muhammad Abdul Khalid, 90 percent of Malaysians do not have proper savings and based from that number, 70 percent from that only have RM500 in their accounts. He also stated that 50 percent of the income of the Malaysian is used to pay the household

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