Manufacturing Sector Largest Recipient of FDI in 2Q 2021

August 2021

In the second quarter of 2021, Malaysia has registered around 325 foreign investment projects in the manufacturing and services sectors. with an estimated total investment value of MYR 97.4 billion (USD 23.55 billion). A further 835 potential projects in these sectors with s proposed investment of MYR 76.7 billion (USD 18.30 billion) are currently being reviewed by the Malaysian Investment Development Authority (MIDA), the government investment promotion agency.
The outgoing international trade and industry minister Mohamed Azmin Ali stated that the private investment in 2Q 2021 had increased by 17.4%, totaling MYR 59.3 billion (USD 14.34 billion) compared to the same period last year. Additionally, the net FDI inflows reached MYR 8.2 billion (USD 1.98 billion) in this quarter, derived mostly from Japan, Indonesia, and the US. This is owing to stronger earnings reinvestment, primarily in the manufacturing sector, financial and insurance/takaful activities, as well as mining and quarrying sectors.
In the first half of 2021, the manufacturing sector remains a key economic sector in the country, accounting for 79.3% of FDI inflow in 2Q 2021, thus driving it to become the largest beneficiary of FDI inflow during this period. The country also obtained a total committed investment of MYR 35.97 billion (USD 8.7 billion), with potential exports worth MYR 3.4 billion (USD 822 million).
In terms of export performance, a further improvement is anticipated in the second half of 2021, with the industrial sector increasing production capacity to meet external demand. The main exports were Electrical & electronics (E&E), Petroleum, and Rubber-based products principally to China, Singapore and the United States of America will boost the production demand for these products due to the pandemic.
Overall, Malaysia’s GDP grew 16.1% year on year in 2Q 2021.
(Sources: Ministry of Finance; Department of Statistics Malaysia; The Edge Markets)

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