KUALA LUMPUR: Malaysia's first quarter of 2024 (1Q24) approved investment performance, along with ongoing proposed investments in the pipeline, support UOB Global Economics & Markets Research's forecast of RM342.5 billion in committed investments for the full year.
This marks a four percent increase from RM329.5 billion in 2023, the firm said in a note today.
"As of May 31, Malaysian Investment Development Authority (Mida) is actively pursuing 1,775 proposed projects worth RM68 billion, comprising 1,709 projects or RM44.7 billion in the services sector and 66 projects or RM23.3 billion in the manufacturing sector," it said in its note.
"In addition to that, ongoing negotiations between Mida and prospect investors for high-potential leads totaled RM60.4 billion," it added.
According to UOB, the sustained implementation of numerous initiatives outlined in national master plans, such as the Madani Economic Framework (MEF), National Industrial Master Plan 2030 (NIMP 2030), National Energy Transition Roadmap (NETR), and the Mid-Term Review of the 12th Malaysia Plan, have increased official investment promotion abroad and facilitated ongoing global supply chain diversification amid heightened geopolitical risks, making them key catalysts for the near-term investment outlook.
It noted that further impetus would be provided by the recently unveiled National Semiconductor Strategy (NSS), which targets to attract at least RM500 billion in investments in the first phase of the plan.
UOB said the facilitation and realisation of these approved investment projects will bode well for the nation's economic growth in the coming years.
"Between 2021 and Mar 2024, approximately 77.2 per cent of the 2,638 approved manufacturing projects have been implemented. About 21.1 per cent are in the planning phase while the balance 1.6 per cent remain unimplemented," it said. "This momentum will help to sustain the country's real private investment and overall gross domestic product (GDP) growth this year," UOB added.
Malaysia approved RM83.7 billion worth of investments in 1Q24, which was a 13 per cent increase from the RM74.1 billion recorded in 1Q23.
A significant portion of the investments, amounting to RM42.9 billion or 51.3 per cent of the total, was allocated to the manufacturing sector.
The services sector received RM39.3 billion, accounting for 47 per cent of the investments, while the primary sector received RM1.4 billion, constituting 1.7 per cent of the total share.
All these investments involved 1,257 projects that are expected to create 29,027 new jobs for Malaysians (1Q23: 1,352 projects and 25,319 jobs).
Foreign direct investments (FDIs) remained the top source of overall approved investments, making up 56.2 per cent or RM47 billion in 1Q24.
The manufacturing sector regained its traction 1Q24 after losing momentum to the services sector in the past two years. The approved manufacturing investments jumped by 174.9 per cent y/y to RM42.9 billion in 1Q24, higher than the RM39.3 billion witnessed in the services sector. Domestic direct investments were the main source of services investments, contributing 77.9 per cent or RM30.6 billion.
The primary sector continued to secure relatively modest investment approvals in 1Q24, at RM1.4 billion. It was mainly driven by domestic direct investments, with the mining sub-sector as the single largest recipient of investments.
