KUALA LUMPUR – Malaysia’s investment momentum, which has seen strong growth since the first quarter of 2023 (Q1 2023), is expected to maintain its upward trajectory in Q2 2023, said Investment, Trade, and Industry Minister Datuk Seri Tengku Zafrul Abdul Aziz.
He said in Q1 2023 Malaysia had secured RM71.4 billion of approved investments in various economic sectors, an increase of 60% from RM44.7 billion registered in the same quarter last year.
“The momentum in Q2 2023, which will be announced soon, is also positive. We are on track and this is a good sign considering the uncertainties surrounding the global market,” he said after Bernama TV’s “Ruang Bicara” programme today.
However, Tengku Zafrul said Malaysia’s total trade will likely moderate in Q2 2023 on the back of the global trade slowdown and is forecast to grow around 1.6 to 1.7% this year in tandem with global economic growth.
He noted that Malaysia is an open economy with its trade to GDP ratio for 2022 standing at 141%, thus it is relying heavily on what is happening globally.
Moving forward, Tengku Zafrul hoped Malaysian companies will continue to focus on growing their exports by expanding into new markets as well as exploring opportunities in the halal market to mitigate the decline in trade figures, following the fall in commodities prices seen since last year.
On Malaysia’s GDP forecast for 2023 of 4-5%, he is optimistic that this could be achieved, however, the minister stressed that the country should not rely on consumption and government spending to garner the growth.
“We have seen that the decisions in the United States have affected the world. There had been a lot of speculation on the next direction of the Federal Open Market Committee (FOMC). The strengthening of the US dollar was due to the tightening of monetary policy and this had pressured other currencies including the ringgit.
“Whatever the FOMC decision is, for Malaysia, we have to focus on our fundamentals and that is why the prime minister had announced the Madani Economy Framework to enhance the economy and improve national competitiveness.
“It is important to focus on the long term so that we could move up to become a high-income nation,” he said.
Tengku Zafrul said that 40% of the measures announced through the Madani Economy are under the responsibility of Miti.
“It is clear that through this economic framework, industrial empowerment, investments and exports are viewed to be among the main contributors to Malaysia’s economic growth,” he said.
On the aim of the Madani Economy to enable Malaysia to be among the top 30 major economies around the globe, Tengku Zafrul said the task could be achieved if everyone put their minds together.
It is a whole of nation approach, and cannot be done in silo anymore, he stressed.
As for the National Energy Transition Roadmap (NETR) announced by Economy Minister Rafizi Ramli, Tengku Zafrul expressed confidence that this would also help increase and attract more investments.
“I think renewable energy (RE) is going to be complementary. We need diversification as we have been relying on one source of energy.
“Of course, there will be a transition and it will take time as the cost is still high compared to the current source of energy that we are using now which is highly subsidised,” said Tengku Zafrul.
However, he opined that it is inevitable to move to RE because Malaysia needs sustainable growth.
To achieve that, the nation needs to have environmental, social, and governance standards in place including RE.
“We have quite a lot of RE investments in the pipeline and it is important to note that investments from multinational companies require RE. Therefore, Tenaga Nasional Bhd and many other companies are venturing into RE as the demand is there. That is why I see big investments coming in.
“It is good we have NETR as it shows that we have plans for the green industry and this would help boost investors’ confidence to invest in the industry,” he added. – Bernama, July 29, 2023
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