WHY MALAYSIA IS THE PREFERRED INVESTMENT HUB

Malaysia is a top investment destination that attracted US$15.4 billion in the first quarter of 2023 across the manufacturing, services, and primary sectors.

MALAYSIA has once again established itself as a top investment destination, attracting US$15.36 billion in approved investments during the first quarter of 2023, according to Prime Minister Anwar Ibrahim. These investments, spanning across the manufacturing, services, and primary sectors, are set to bring prosperity and create 23,977 job opportunities nationwide. Foreign Direct Investment (FDI) continues to outpace Domestic Direct Investment (DDI), with FDI contributing around US$8 billion, accounting for 52.5% of the total approved investments.

Over the years, the country has forged an extensive network of implemented regional and bilateral trade agreements which have enabled Malaysia-based exporters and investors to enjoy a myriad of benefits such as tariff concessions, expanded market access, and strengthened economic integration with partner nations and regions. As a result, Malaysia’s robust international trade activities have played a key role in driving its sustained economic growth and overall development, firmly establishing the nation as a prominent player in the global marketplace.

Malaysia highly values international trade and investment as a key driver of its economic growth. To this end, the country has ratified seven bilateral Free Trade Agreements (FTAs) with Australia, Chile, India, Japan, New Zealand, Pakistan, and Türkiye.

Malaysia has been proactively seeking new free trade agreements (FTAs) to expand its trade opportunities. As of November 29th, 2022, the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP) has come into effect for Malaysia, providing significantly increased market access to the economies of Malaysia and the United Kingdom.

On 30th May, Prime Minister Datuk Seri Anwar Ibrahim, who is also Finance Minister, said the government is committed to further facilitate ease of doing business and support domestic direct investments. “The government has taken various measures to catalyze and attract high-quality investments that will generate linkages with local businesses and high-income job opportunities. This includes Budget 2023 measures to support small and medium enterprises (SMEs) particularly through the provision of various financing facilities and guarantees worth RM40 billion,” he added.

According to the Malaysia External Trade Development Corporation, the country’s trade surplus in July 2023 increased by 7.9% year-on-year to RM17.09 billion and was the 39th consecutive month of trade surplus since May 2020.

Trade Performance
In tandem with slower global demand and lower commodity prices, total trade contracted by 16.3% to RM222.14 billion. Exports slipped by 14.1% to RM123.98 billion and imports decreased by 18.9% to RM98.16 billion. The performance was similar to other regional markets notably China, Singapore, Indonesia, Taiwan and the Republic of Korea (ROK) which recorded negative trade growth for June 2023.

Despite the decline, strong exports were posted primarily for electrical and electronic (E&E) products, iron and steel products, metalliferous ores and metal scrap, transport equipment as well as processed food.

Compared to May 2023, exports and trade surplus expanded by 3.7% and 64.4% while trade and imports were down by 0.5% and 5.4%, respectively.