Speedy vaccine rollout to restore economic recovery, investment to regain momentum - MIDA | Malaysian Investment Development Authority
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Speedy vaccine rollout to restore economic recovery, investment to regain momentum

Speedy vaccine rollout to restore economic recovery, investment to regain momentum

14 Jun 2021

The country’s expedited vaccination rollout will help restore the economic recovery and investments regain momentum, said UOB Malaysia.

Senior economist Julia Goh said the bank had maintained its full-year investment approvals at RM185 billion in 2021 compared to RM167.4 billion in 2020, despite near-term challenges under the current nationwide lockdown.

“The recovery in investment approvals will help stimulate private investments and expand productive capacity in sectors that continue to see robust growth and demand,” she said in a macro note report today.

As of March 2021, a total of RM54.4 billion of proposed investments could be actualised this year, subject to the course of the pandemic, vaccination rates, containment measures, and global macro conditions.

The government has announced several initiatives under the previous stimulus plans and the 2021 Budget to attract high-value investments.

This included the Malaysian Investment Development Authority’s (MIDA) Project Acceleration and Coordination Unit (PACU) to provide end-to-end facilitation for all approved projects, with several online services introduced to apply and obtain approvals for licences and incentives and exemptions to expedite execution of projects.

MIDA had also introduced a new process workflow for expatriate applications.

There is also a One-Stop-Centre (OSC) to evaluate applications of eligible business travellers to enter Malaysia for trade and investment purposes.

Malaysia’s total approved investments surged 95.6 per cent year-on-year (YoY) to RM80.6 billion in the first quarter (Q1) of 2021 RM41.2 billion recorded a year ago, despite the lingering Covid-19 pandemic challenges.

The manufacturing sector continued to attract the highest level of investments at RM58.8 billion, which amounted to 72.9 per cent of total approved investments, followed by services RM15.6 billion or 19.4 per cent) and the primary sector (RM6.2 billion or 7.7 per cent).

UOB Malaysia said the rebound in foreign direct investment (FDI) approvals was evident given higher foreign investment approvals of RM54.9 billion (or 68.1 per cent of total) against RM25.7 billion (31.9 per cent) of domestic investment approvals in Q1 this year.

The bulk of FDI was channelled into the manufacturing sector, accounting for RM52.3 billion or 95.2 per cent of total FDI approvals.

Among the leading sources of FDI in the manufacturing sector were Singapore, South Korea, the Netherlands, Taiwan, China, United States, Switzerland, Denmark, Germany, and Hong Kong.

Key recipients of approved investments in the manufacturing sector were Kedah (RM42.4 billion), Sabah (RM4.3 billion), Selangor (RM4.0 billion), Melaka (RM3.4 billion), and Johor (RM1.7 billion).

These states contributed 95.1 per cent or RM55.8 billion to the total approved investments that will fund 165 projects.

Source: NST