KUALA LUMPUR, October 20 – Malaysia has successfully attracted RM132.6 billion (USD28.4 billion) in approved investments across the services, manufacturing, and primary sectors in the first half of 2023. This comprises 2,651 projects that are expected to create 51,853 job opportunities in the country. These investments signify a strong vote of confidence in Malaysia’s economy and its attractiveness to investors, which is driven by several key factors, a government that supports pro-business policies and continuously improves the ease of doing business.
A strategic location in Asia with substantial growth potential. A trusted hub for ecosystems, supply chains, capital, talent, and data and growing innovation capabilities. YB Senator Tengku Datuk Seri Utama Zafrul Tengku Abdul Aziz, the Minister of Investment, Trade, and Industry (MITI), expressed satisfaction with these results, stating, Despite global demand slowdown and a higher interest rate environment in key markets, 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.
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. The total approved investments are also set to create at least 50,000 jobs for Malaysians. He further added, “I am pleased with our achievement in 1H2023, securing RM132.6 billion, representing 60.3% of our annual target. This achievement closely mirrors our ten-year average of RM222.6 billion, emphasizing our consistent efforts in attracting quality investments and driving economic growth.
With stronger growth expected in the second half, I am confident we will be able to achieve our target for this year. The recently unveiled New Industrial Master Plan 2023 (NIMP2023) plays a pivotal role in positioning Malaysia as a regional hub for international companies and entrepreneurs seeking to expand their footprint in Asia. The plan aims to integrate Malaysian SMEs into regional and global supply chains while fostering economic cooperation with neighboring nations. Domestic Direct Investment (DDI) accounted for 52.2% of the total approved investment, or RM69.3 billion (USD14.8 billion).
This reflects a remarkable surge of 58.2% compared to the same period in 2022, highlighting the competitiveness of local players, particularly in the services and primary sectors. Foreign Direct Investment (FDI) contributed 47.8% or RM63.3 billion (USD13.6 billion) to the approved investments. Singapore led in FDI with RM13.7 billion (USD2.9 billion), followed by Japan (RM9.1 billion), the Netherlands (RM9.0 billion), the People’s Republic of China (PRC) (RM8.4 billion), and the British Virgin Islands (RM7.1 billion).
Five states recorded significant approved investments: Wilayah Persekutuan Kuala Lumpur (RM31.7 billion), Selangor (RM29.7 billion), Kedah (RM14.6 billion), Johor (RM14.2 billion), and Sabah (RM9.0 billion), together accounting for 74.9% of the total approved investments.
The services sector led in investment approvals during the first half of 2023, with RM82.4 billion (USD17.6 billion) approved, accounting for 62.1% of the total. Investments in the services sector are expected to create 24,747 new jobs and were driven by efforts to diversify Malaysia’s economy beyond manufacturing, growth in the digital economy, and increasing demand for services such as logistics, healthcare, and education. The manufacturing sector attracted RM44.9 billion (USD9.6 billion) in approved investments, accounting for 33.9% of the total. This represents a 2.5% increase from the same period in 2022.
Investments in this sector are set to generate an estimated 26,759 job opportunities, with FDI contributing RM33.9 billion and domestic investments contributing RM11.0 billion. The primary sector secured RM5.3 billion (USD1.2 billion) in approved investments, constituting 4.0% of the total. This reflects a 22.5% increase compared to the previous year, with RM3.8 billion originating from domestic sources and RM1.5 billion from foreign investments. The mining subsector experienced substantial growth, increasing by RM3.0 billion (150.2%).
As of July 2023, there are 860 projects within MIDA’s pipeline, with proposed investments of RM89.9 billion (USD19.8 billion), driven by Malaysia’s thriving digital economy, innovation ecosystem, and R&D. The country’s competitive prowess is underscored by its ranking of 27th in the 2023 IMD World Competitiveness Ranking and its second-place ranking in ASEAN as the Most Competitive Country. This highlights Malaysia’s enduring appeal for businesses and investors.
