KUALA LUMPUR (June 26): Malaysia recorded foreign direct investment (FDI) net inflows of RM40.4 billion in 2023 from RM75.4 billion the previous year, says the Department of Statistics Malaysia (DOSM).

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the decrease in FDI net inflow was mainly in equity and investment fund shares, reflecting the global economic slowdown.

"This was in line with the United Nations Trade and Development's (UNCTAD) 2024 Global Investment Trends Monitor report which highlighted that the FDI inflows to developing countries had declined about 9% to US$841 billion in 2023.

"Notably, FDI to developing Asia dropped around 12% to US$584 billion, with Asean's FDI decreasing about 16%," he said in a statement on Wednesday.

However, DOSM said, the cumulative value of foreign investment, known as the FDI position, rose to RM926 billion at the end of 2023, making up 50.8% of gross domestic product (GDP) versus 49% in 2022, primarily attributed to non-transaction categories.

It said on average, the return on investment (ROI) for FDI companies in 2023 fell to 10 sen for every RM1 of investment from 12 sen in the previous year.

Concurrently, Malaysian companies received six sen for every RM1 of investment made abroad, it added.

On direct investment abroad (DIA), DOSM noted that the net outflow narrowed to RM40.6 billion in 2023 from RM62.8 billion in the preceding year, mostly contributed by the services sector with a value of RM34.5 billion, primarily in financial and insurance/takaful activities, as well as utilities.

Mohd Uzir said the services sector remained the primary contributor of DIA by registering an accumulated amount of RM461.1 billion in 2023, trailed by mining and quarrying (RM80.5 billion) and manufacturing (RM60 billion).

"The services sector also generated the highest income at RM23.9 billion in 2023," he added.

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