Foreign Direct Investment into Malaysia Dropped a Whopping 46.4%, from RM75.4 Billion to RM40.4 Billion

Previously, Malaysia’s worst performance in the World Competitiveness Ranking made headlines nationwide as our country was overtaken by neighbouring nations Indonesia and Thailand for the very 1st time.

Minister of Investment, Trade and Industry has since pointed to the weak Ringgit in 2023 as the main reason behind the drop, asserting that Malaysia’s placement in the ranking would improve in the next edition.

Foreign Direct Investment (FDI) into Malaysia dropped by a whopping RM35 billion last year

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Now, further details have come out about Malaysia’s economic performance last year, this time in regard to Foreign Direct Investment (FDI) and Direct Investment Abroad (DIA).

In a statement by the Department of Statistics Malaysia (DOSM), it was announced that the FDI net inflows into Malaysia in 2023 were almost half what they were a year prior.

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Specifically, FDI inflows decreased from RM75.4 billion in 2022 to RM40.4 billion last year, a staggering 46.4% decrease!

The statement added that the FDI inflows were mainly in equity and investment fund shares last year, which reflects the global economic slowdown in 2023.

DOSM further elaborated that the decrease was in line with the UNCTAD’s 2024 Global Investment Trends Monitor report which asserted that the FDI flows to developing nations declined approximately 9%. Notably, ASEAN’s FDI decreased by about 16% last year.

FDI position actually rose to RM926 billion

It’s not all gloom and doom though, as DOSM highlighted that Malaysia’s cumulative value of foreign investment, known as FDI position actually rose to RM926 billion at the end of 2023. making up 50.8% of the Gross Domestic Product (GDP), 0.9% more than in 2022.

Meanwhile, DIA recorded a decrease in net outflow from RM62.8 billion in the preceding year, while the stock increased to RM664,4 billion, representing 36.4% (2022: 33.8%) of GDP.

So, what do you guys think of the statistics? Share your thoughts with us in the comments!

Also read: Indonesia & Thailand Overtake Malaysia in World Competitiveness Ranking for 1st Time as We Drop to 34th