KUALA LUMPUR – Malaysia’s net inflow of foreign investment was recorded at RM48.1 billion for 2021 while at the same time, investments abroad totalled RM19.7 billion, the Department of Statistics Malaysia (DOSM) revealed.
In the DOSM’s recently published Statistics of Foreign Direct Investment (FDI) in Malaysia and Malaysia’s Direct Investment Abroad (DIA) for 2021, Bernama reported that the foreign investment net inflow showed a growth of RM34.8 billion from the RM13.3 billion recorded in 2020.
As for the investments abroad, 2021’s performance also grew RM9.5 billion from the RM10.2 billion in the previous year.
In a recent statement, chief statistician Datuk Seri Dr Mohd Uzir Mahidin stated that FDI registered a higher value of RM788.8 billion as of the end of 2021.
He explained that economic activities were progressively recovering from the effects of the COVID-19 pandemic.
According to the World Investment Report produced for the UN’s Conference on Trade and Development, developing Asian countries saw a 19% growth of FDI flows, amounting to US$619 billion in 2021.
“As a result, the foreign investment into Malaysia grew to register RM48.1 billion last year, which is the highest level since 2016,” Mohd Uzir stated.
Upon elaborating on the FDI performance by sector, the statistician explained that the manufacturing sector had grown by RM22.5 billion and recorded net inflows of RM29.5 billion. This made up the largest flows in Malaysia’s FDI.
The manufacturing sector had brought in 61.4% of the total foreign investment, primarily in the electrical, transport equipment, and other manufacturing sub-sectors.
This is followed by the services sector that was the second highest contributor mainly in financial activities. Ranking third is the mining sector which received equity and investment fund shares, he said.
Foreign investment in Asia still strong
Commenting on Malaysia’s investments with more than 190 countries, he stated that the Asian region was still the top source of Malaysia’s foreign investment in 2021, recording net inflows of RM22.5 billion mainly from Singapore, Japan and South Korea. These three countries made up RM17 billion of Malaysia’s FDI.
The Asian region ranked first as the predominant source of FDI totalling RM413.1 billion as of the end of 2021. Europe and the United States followed with RM207.7 billion and RM153.0 billion respectively.
By the end of 2021, the total FDI grew by RM103.9 billion, bringing the total to RM788.8 billion. Due to financial and wholesale activities, the services sector continued to be the largest recipient at 49.2% or RM388.4 billion of the total foreign investment.
Next was the manufacturing sector that made up 42.2% of the total FDI due to the electrical, transport equipment and other manufacturing sub-sectors.
DIA performance mirrored foreign investment inflow
Mohd Uzir said that just like the FDI performance, Malaysia’s DIA flow also had a growth of RM9.5 billion to RM19.7 billion due to the increasing investment in the manufacturing and services sectors.
The manufacturing sector surpassed the services sector to become the lead contributor to the DIA, making up 40.5% (RM7.97 billion) of the total investment. Similar to the foreign investment, the manufacturing sector also saw primary investments in the electrical, transport equipment and other manufacturing sub-sector.
The services sector made up 30.3% (RM5.96 billion) most notably from the financial activities sector.
Europe was the most prominent region of DIA inflows for 2021, making up 54.9% of it, particularly in the Netherlands and the United Kingdom.
Mohd Uzir said that the investments were primarily channelled to the Netherlands, Canada, and Indonesia.
The DIA flows were predominantly in the form of equities and investment fund shares, with a share of 61.7% ascribed to higher profit retained overseas despite lower outflows in equity.
At the same time, debt instruments also recorded increased net outflows due to the activities in trade credit.
The total value of DIA as of the end of 2021 recorded RM547.0 billion compared to the RM515.1 billion in 2020.
In 2020, the investments were predominantly in Singapore, Indonesia and the United Kingdom.
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