Between year 2000 to 2010GDP current price = Approx RM380 to 730b (1.9X)
Domestic Debt (banking sector) over GDP = (1.7X)
M1 growth = 78-198b = (2.5X)
M2 growth = 356-996b = (2.8X)
M3 growth = 458 - 1025b = (2.3X)
Housing loan (2002-2010) = 71-219b = (3X)
Car loan (2002 - 2010) = 37-116b (3.2X)
Personal loan (2002-2010) = 2-21b (10.5X)
Household debt over GDP (2000-2010) = 40% to 65%.
Based on the figures above, GDP growth is primarily driven by credit. Malaysia is highly dependable on credit to finance its growth.
Average GDP growth(2000-2010) is about 5.7% except for 2001 (0.1%) and 2009 (-1.7%).
M1,2&3 growth is much higher than the GDP growth.
MyView
The above statistics mainly show the negative side of Malaysia growth story. One concern is the housing loan growth had grown 3X since 2000 and car loan 3.2X. This are fixed assets growth, which is not related to production or productivity. It is not very healthy if fixed assets growth constitute big portion of the GDP.
Other credit creation like derivatives is definitely not included. Public sector like Cagamas is also excluded. Of course, non banking sector also not included.
Some of the unhealthy practice on loan is even at the age of 40, one can take loan up to 30 years, which was not done previously. And the loan to value ratio went as high as 5/95 which was not hear many years back. These are easy CREDIT. And easy credit always cause INFLATION, the silent killer of value.
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