UOB boosts Malaysia’s 2023 investment forecast to RM300b
28 Dec 2023
UOB Global Economics & Markets Research has revised its 2023 forecast for approved investments in Malaysia, increasing it to RM300 billion.
This adjustment comes in light of the country’s robust performance in the first nine months, achieving 98.7% of the initially projected full-year target of RM228 billion, despite enduring macroeconomic challenges.
The updated outlook considers Malaysia’s favourable growth prospects, political stability, strategic geographical location, government efforts to attract investments, and the existing pipeline of proposed investments overseen by the Malaysian Investment Development Authority (Mida), as stated in a recent report.
As of November 2023, Mida’s pipeline comprises a total of 1,428 projects with proposed investments amounting to RM72.3 billion.
Among these, 1,352 projects are from the selected services sector (RM31.8 billion), while 76 projects fall under the manufacturing sector (RM40.5 billion).
Additionally, Mida is actively negotiating high-potential investment leads totalling RM161.6 billion.
Major blueprints launched in 2023, including the Madani Economic Framework (MEF), the New Industrial Master Plan (NIMP) 2030, the National Energy Transition Roadmap (NETR), and the Mid-Term Review of the 12th Malaysia Plan (MTR of 12MP), collectively offer multi-trillion ringgit investment opportunities, enhancing Malaysia’s position in the regional investment landscape.
In the first three quarters of 2023, Malaysia has continued to strengthen its status as a favoured investment destination, attracting substantial commitments totalling
RM225 billion, marking a noteworthy 6.6% surge compared to the same period in the previous year.
This resilience and attractiveness to both global and domestic investors are reflected in a diverse range of 3,949 projects, with the potential to generate an estimated 89,495 job opportunities.
Breaking down the investment distribution, the services sector secured the lion’s share with RM117.7 billion, constituting a substantial 52.3% of the total committed investments.
The manufacturing sector followed closely with RM99.8 billion, reflecting a 44.4% share, while the primary sector contributed RM7.4 billion, comprising a 3.3% share.
Geographically, several states and federal territories demonstrated particular appeal for investors, with Kuala Lumpur, Penang, Selangor, Kedah and Johor collectively accounting for a substantial 79.1% of the total committed investments.
Foreign direct investments (FDIs) continued to play a pivotal role, constituting RM125.7 billion or 55.9% of the total approved investments in the first three quarters of 2023.
Noteworthy is the dominance of FDIs in the manufacturing sector, contributing RM84.8 billion or a commanding 67.5% share.
Key contributors to this influx of foreign investments included the Netherlands, Singapore, the US, China and Japan, collectively representing 77.2% of the total FDIs during this period.
In contrast, domestic direct investments (DDIs) made a robust contribution of RM99.3 billion, constituting 44.1% of the overall quantum of committed investments, marking a noteworthy 45.2% year-on-year increase.
The report also highlights the evolving landscape of investments, particularly in the services and manufacturing sectors.
Investments in green technology witnessed a significant uptick of 24.6% year-on-year, aligning with Malaysia’s commitment to environmental sustainability.
Notable projects within the services sector include a hyper-scale data centre, a RM1.4 billion investment for a smart warehouse, and innovative solar technology projects.
The manufacturing sector experienced substantial growth of 53.9% compared to the same period in 2022, with a notable focus on the electrical and electronics industry.
Expansion and diversification projects, totalling RM62 billion, were complemented by RM37.8 billion from new projects, contributing to the sector’s robust performance.
Within the primary sector, although there was a decline in approved investments to RM7.5 billion, domestic direct investments remained active, contributing RM5.6 billion, primarily in the mining and plantation, and commodities sub-sectors.
Source: The Malaysian Reserve
