RM132.6bil in approved investments for first half of 2023, on track to hit target, says Tengku Zafrul

KUALA LUMPUR: The Investment, Trade and Industry Ministry (Miti) expects approved investments to record stronger growth in the second half of 2023 (2H2023), on track to hit its annual target, after achieving RM132.6bil worth of approved investments in the first half of 2023 (1H2023).

“I am pleased with our achievement in 1H2023, securing RM132.6bil, representing 60.3% of our annual target.

“This achievement closely mirrors our ten-year average of RM222.6bil, emphasising our consistent efforts in attracting quality investments and driving economic growth,” International Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz (pic) said in a statement Sunday (Sept 17).

For the first six-month period, Malaysia attracted a total of RM132.6bil (US$28.4bil) worth of approved investments in the services, manufacturing and primary sectors involving 2,651 projects from January to June 2023 and is expected to create 51,853 job opportunities in the country.

Tengku Zafrul said the investments are a vote of confidence in Malaysia’s economy and its offerings to investors, including a government that supports and develops pro-business policies and continuously enhances the ease of doing business in Malaysia.

The minister said Malaysia is also a trusted hub for the ecosystem, supply chain, capital and talent, flows of goods and data and growing innovation capabilities.

He said Malaysia managed to attract approximately a similar amount of approved investments in 1H2023 year-on-year, reflecting confidence in the nation’s economic growth prospects despite global demand slowdown and a higher interest rate environment in key markets.

“Notably, direct domestic investment increased by 58% and represented over 52% of approved investments which to us is a clear vote of confidence in the Madani economy policies,” he said.

He said the total approved investments are also set to create at least 50,000 jobs for Malaysians.

“As various global supply chains shift to Asia, our key aim is to position Malaysia as a regional hub for both international companies and entrepreneurs seeking to expand their footprint in Asia.

“To that end, the recently unveiled New Industrial Master Plan 2023 (NIMP2023) represents a pivotal step in Malaysia’s journey toward sustainable industrial transformation and enhanced global competitiveness,” he said.

Domestic direct investment (DDI) accounted for 52.2% of the total approved investment, or RM69.3bil (US$14.8bil), driven by investments in the services sector, particularly real estate and primary sector.

Tengku Zafrul said the government’s commitment to ensure quality housing for the people has been a major factor in this growth.

He said Miti and the Malaysian Investment Development Authority (Mida) remained steadfast in their commitment to achieve a balanced blend of foreign direct investment (FDI) and DDI.

The minister said this balance is clearly demonstrated in the amount of FDI, which contributed 47.8%, or RM63.3bil (US$13.6bil), to the approved investments.

He said the country’s source of FDI came from Singapore with approved investments totalling RM13.7bil followed by Japan (RM9.1bil), the Netherlands (RM9bil), China (RM8.4bil) and British Virgin Islands (RM7.1bil).

Five states recorded significant approved investments, namely the Federal Territory of Kuala Lumpur (RM31.7bil), Selangor (RM29.7bil), Kedah (RM14.6bil), Johor (RM14.2bil) and Sabah (RM9bil).

Together, these top five states accounted for an impressive 74.9% of the total approved investments.

Mida chief executive officer Datuk Wira Arham Abdul Rahman said Malaysia’s strong economic fundamentals and reputation for being stable, reliable and neutral allowed it to capture quality investments from diverse sources.

“The long-term prospects and outlook for the digital industry remain promising. Companies across a variety of industries continue to build capabilities in data, digitalisation and automation,” he said.

He said there are also opportunities from the growing digital economy in South-East Asia, including in fintech, cloud, cybersecurity and gaming.

“We anticipate a sustained demand for tech-related skills across all sectors in Malaysia.

“Nevertheless, our journey towards the future also hinges significantly on our ability to align with global mega-trends, particularly in the context of environmental, social and governance (ESG) practices,” he said.

He added that implementing an ESG-based business model, especially by local SMEs, held the potential to not only bolster competitiveness but also amplify Malaysia’s presence within the global value chain, propelling the country into a future characterised by sustainable and responsible growth. – BK