Malaysia approved RM264.6 billion in investments in 2022. Only one year has ever beaten that: 2021. International Trade and Industry Minister Tengku Zafrul Abdul Aziz said so himself at a Malaysian Investment Development Authority (Mida) media conference on the country’s 2022 investment performance.
He had a ready explanation for the gap. “There were two large one-off investments that happened in 2021 from Intel and China’s Risen Energy Co Ltd,” he told reporters.
Services lead the way
Services took the biggest share, with RM154 billion in approved investments, or 58.2 percent of the total. Manufacturing followed at RM84.3 billion (31.9 percent). Primary industry drew RM26.3 billion (9.9 percent).
Foreign direct investment made up 61.7 percent of the approvals, or RM163.3 billion. Domestic direct investment contributed RM101.3 billion, or 38.3 percent. China was the largest foreign source at RM55.4 billion, ahead of the United States (RM29.2 billion), the Netherlands (RM20.4 billion), Singapore (RM13.5 billion) and Japan (RM11.4 billion).
Zafrul said the approved projects are expected to create 140,370 jobs.
Where the money is going
Johor attracted RM70.6 billion, the most of any state. Selangor was next with RM60.1 billion, then Sarawak with RM28.2 billion, Kuala Lumpur with RM25.0 billion and Penang with RM16.3 billion.
The minister wants more. “This must be improved further in the near future,” he said, pointing to a renewed focus on effective economic policy, a favourable investment environment, political stability and more coordinated investment promotion by agencies at federal and state levels.
He said the New Investment Policy reforms fit with the 12th Malaysia Plan, which aims to reset the economy by enhancing security, promoting well-being and inclusivity, and advancing sustainability. On the digital side, Zafrul said Malaysia is working to become Asean’s digital hub, citing its developed information and communications technology infrastructure, intellectual property protection and talent pool. The ministry’s “Academy in Factory” initiative under Budget 2023 is meant to supply skilled labour that matches what industry needs.
The 2023 outlook
Zafrul acknowledged that slower global growth may weigh on investment decisions this year. The International Monetary Fund and the World Bank both expect positive but slower growth than in earlier years, and investment also depends on demand. “Investment decisions are a little different from trade as it is based on long-term plans,” he said. “The important thing is the country’s fundamentals.”
He expects the economy to stay resilient despite inflationary pressures, economic uncertainty and climate change. The World Bank estimates Malaysian growth of 4.0 percent and the IMF 4.4 percent, in line with the government’s recent forecast of approximately 4.5 percent. Malaysia also continues targeted trade and investment missions and takes part in free trade agreements including the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
