UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting, give their views on the recent investment data in the Malaysian economy.
Key Quotes
“Total approved investment in the primary, manufacturing, and services sectors recorded MYR64.8bn in 1H20, which is 38.4% y/y lower compared to a year ago amid the COVID-19 outbreak. Manufacturing investment approvals was supported by strong domestic manufacturing investments that surged by almost 80% y/y to MYR17.9bn.”
“More than two-thirds of overall manufacturing investments in 1H20 were new greenfield projects. Key sub-sectors included petroleum refineries & products, machinery manufacturing, electrical and electronics products, food manufacturing, and scientific & measuring equipment. Sabah, Penang, Johor, Selangor, and Terengganu were top five states garnering the most manufacturing investment interest. Foreign sources of approved manufacturing investment primarily came from Singapore, Switzerland, the US, China, and Thailand.”
“Despite the ongoing pandemic effects and downside risks to the global and Malaysia economic outlook, year-to-date investment approvals represented 61.8% of Malaysia’s full-year approved investment during 2009 GFC and have already hit 64.8% of our 2020 full-year target of MYR100bn. Actualisation of these investment approvals could help jump-start private investments in 2021-2022. The government announced several tax incentives in the PENJANA economic stimulus plan to attract FDIs. We anticipate further announcements to stimulate investments in the coming Budget 2021 that will be tabled on 6 Nov.”
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