Watch out for 2013

In Greece, the economy will have to shrink by a fifth since 2008, GDP fall by 6.2% in Q1 2012 with no sign of recovery and youth unemployment topping 50%. Overall, unemployment spike to record high of 21%; more than 100,000 small businesses closed; wages and pensions have been badly cut. Its budget deficit, despite stringent efforts to consolidate, will reach 7.3% of GDP, and increase to 8.4% in 2013; by then, it debt/GDP ratio will rise to 168%.

The above is just an excerpt from an article in The Star’s Biz Week (Saturday, 19/5/2012). I believe most of you noticed that there are many headlines about world crisis in whatever you read, particularly on what’s happening in US and Europe. Even China is showing sign of economy slowing down this year.

The whole world seems so wrong but Malaysia is doing so well. Our stock market (KLSE) has just touched all time high recently. Bank Negara has to tighten the lending guidelines to cold down the property market because everyone seems to buy properties like buying vegetables (although property prices are also at all time high). Everything seems so unreal.

It’s not too hard to understand. Every time there’s an election, the government will spread out as many good news as possible, spends as much money as it can to stimulate the economy so they get votes. So the economy is going to look better than it does normally. Many expected our General Election (GE) by Q2 or Q3 this year. United States Presidential election is on Nov this year. Expert predicted more challenging times ahead for the world economy in 2013; after Malaysia’s GE (from micro perspective) and US Presidential election (from macro perspective).

Watch out for 2013 and starts bulletproof your portfolio.