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Senior Economist Julia Goh and Economist Loke Siew Ting at UOB Group commented on the latest Approved Investments figures in Malaysia.

Key Quotes

“Malaysia’s total approved investments came off by 22.4% to MYR164bn in 2020 following the adverse impact of COVID-19 pandemic. On a positive note, manufacturing investment approvals rose by +10.3% to MYR91.3bn. This was offset by lower approvals in services (2020: -45.2% to MYR66.7bn) and primary (2020: -13.9% to MYR6bn) sectors.”

“A large part of the approvals was domestic direct investments (DDI), accounting for MYR99.8bn or 60.9% of total investments. Approved foreign direct investments (FDI) was MYR64.2bn or 39.1% of total. China, Singapore and the Netherlands were the top sources of FDI last year, with a combined share of 54.8% of total FDI approved.”

“Despite the impact of tighter restrictions in 1Q21 and lingering effects of the pandemic, various initiatives have been implemented by the government and the Malaysian Investment Development Authority (MIDA) to attract investments. Global macro conditions will be the prime driver of actualised investments over the next 2-3 years. Other key drivers include the country’s vaccine rollout that started on 24 Feb and targets to vaccinate 80% of the population by 1Q22. We expect total investment approvals to trend up to MYR185bn in 2021.”