MoF: Increase in Fitch GDP growth projection due to steady rise in FDI
KUALA LUMPUR, Aug 20 — International Fitch Rating Agency has revised its 2019 gross domestic product (GDP) growth projection for Malaysia from 4.2 per cent to 4.6 per cent due to the steady rise in total foreign direct investment (FDI) in the second quarter, said the Finance Ministry.
Its minister Lim Guan Eng said in a statement today that Putrajaya expects the GDP to expand 4.5 to 5 per cent this year, based on the first half-year trend.
“The International Investment Position (IIP) document published by the Department of Statistics Malaysia (DOSM) shows that total stock of foreign direct investment (FDI) in Malaysia rose by 10.3 per cent to RM667.5 billion in the second quarter of 2019, from RM605.1 billion a year ago.
“The steady rise in total FDI stock shows the continuing attractiveness of Malaysia as an international investment destination, amid rising trade tensions across the world,” Lim said in the statement.
Lim said the Malaysian GDP has expanded 4.9 per cent year-on-year, which is an acceleration from the 4.5 per cent growth in the first quarter of 2019.
He said the 4.9 per cent quarterly growth was better than market expectations of 4.7 per cent, as compiled by Bloomberg.
He added the Malaysian Investment Development Authority (MIDA) had also approved the FDI is surging in the first half of the year, as it had last week announced that FDI across all sectors rose 97.2 per cent to RM49.5 billion in the first half of 2019, from RM25.1 billion in the same period last year.
“Specifically, approved manufacturing FDI rose by 74.2 per cent to RM33.1 billion during the first half of 2019, from RM19.0 billion in the same period last year. Out of the RM33.1 billion investment, RM11.7 billion came from the United States, making the US as the biggest source of approved manufacturing FDI during the period.
“China is the second biggest source with RM4.8 billion. Meanwhile Singapore is third with RM3.1 billion and Japan is fourth with RM2.1 billion.
MIDA states that the RM33.1 billion approved manufacturing FDI would create 30,449 jobs in the near future. The government will maintain its business-friendly approach to attract investment into the country and create quality jobs for all Malaysians,” he said.
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