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Services sector, Malaysia's silver lining amid downturn

Publish date: Thu, 29 Feb 2024, 05:38 PM

KUALA LUMPUR: The services sector has turned out to be a silver lining for Malaysia amid the economic slowdown.

The sector attracted RM168.4 billion, or 51.1 per cent of the total approved investments last year,  according to Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

Malaysia's approved investments surged 23 per cent to RM329.5 billion in 2023 from RM267.7 billion in the previous year for the manufacturing, services and primary sectors.

"More than 52,000 (52,732) job opportunities are expected to be created," Tengku Zafrul said when announcing Malaysia's investment performance for 2023 here today. 

He said foreign investments (FI) accounted for a substantial 57.2 per cent or RM188.4 billion of the total approved investments, while domestic investments (DI) contributed 42.8 per cent or RM141.1 billion.

The investment influx was predominantly led by five countries led by Singapore (RM43.7 billion), and followed by the Netherlands (RM35.5 billion), the United States (RM21.5 billion), Cayman Islands (RM17.5 billion) and China (RM14.5 billion) together accounting for 70.4 per cent of total FI, or RM132.7 billion. 

"This diversification in foreign investment sources underscores Malaysia's global appeal and the confidence of international investors in its robust investment landscape," he said. 

On the manufacturing sector, Tengku  Zafrul said this sector attracted a total of RM152.0 billion in approved investments, accounting for 46.1 per cent of the total approved investments across all industries. 

This marks a significant increase of 80.3 per cent from RM84.3 billion recorded in 2022.

Other industries contributing to the manufacturing sector's growth include machinery and equipment (M&E) (RM22.6 billion), chemicals and chemical products (RM8.9 billion), non-metallic mineral products (RM8.8 billion), transport equipment (RM7.1 billion), and plastic products (RM4.1 billion). 

"These industries collectively underscore the manufacturing sector's diversification and its capacity for high-value production," he said.

Tengku Zafrul said the overall performance shows that as a country with strong policies that support growth and investment prospects, Malaysia offers a huge potential for attractive returns alongside the nation's clear vision to become a developed and inclusive economy.

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