FDI soars 73.4% in first quarter to RM29.3bil


 Finance Minister Lim Guan Eng said the development indicated a healthy second quarter gross domestic product growth.

Finance Minister Lim Guan Eng said the development indicated a healthy second quarter gross domestic product growth.

PETALING JAYA: Approved foreign direct investment (FDI) for all sectors skyrocketed in the first quarter of 2019, rising 73.4% to RM29.3bil.

This compares to the RM16.9bil in approved FDI recorded during the same period last year, the Finance Ministry said.

The investments recorded in the first quarter are expected to create over 41,200 jobs for Malaysians, of which 22,970 employment opportunities will be in manufacturing and 18,000 jobs in the services sector, it said.

In a statement, Finance Minister Lim Guan Eng said the development indicated a healthy second quarter gross domestic product growth.

The surge in approved FDI in the first quarter, he said, was driven by a 127% jump in investments into the manufacturing sector, totalling RM20.2bil, compared to RM8.9bil a year ago.

Out of the RM20.2bil investment, he said RM11.5bil came from the US, RM4.4bil from China and RM2.2bil from Singapore.

Among the significant investments were from Micron Technology and Jabil Circuit, which are expanding their respective operations in Penang.

Lim said the increased FDI figures were in line with the trade and investment diversion, which has benefitted Malaysia.

The country, he said, was enjoying a persistent positive trend which was earlier evidenced by the 48% rise in approved FDI in 2018 to RM80.5bil from RM54.4bil in 2017.

“Malaysia is reaping benefits from business relocation as well as trade and investment diversions caused by the trade war between China and the US.

“As a result, FDI into Malaysia has increased drastically,” he said.

Lim also noted that industrial production growth in April 2019 had accelerated toa six-month high amid an environment of low and stable inflation.

The April 2019 industrial production growth accelerated to 4% year-on-year from 3.1% in March, supported by robust manufacturing growth and mining output recovery.

The 4% industrial expansion was the strongest in six months and came in above the market consensus of 2.5%, according to Bloomberg.

In March 2019, the industrial production growth of 3.1% had also come in above market expectations of 2.3%.

The Finance Ministry, in the statement, also noted that the April 2019 industrial expansion occurred during a period of low and stable inflation of 0.2%.

“Prices of some basic consumer items have fallen due to multiple factors,

including the shift in the taxation regime from the burdensome goods and services tax to the sales and service tax, and the imposition of price ceilings on RON95 and diesel,” it said.

In February 2019, the ceiling price of RON95 was reduced from RM2.20 per litre to RM2.08 per litre.

As an example of the lower prices of consumer items, the ministry noted that the average price of lady’s fingers in April 2019 was RM7.30 per kg, which is 25 sen lower than its price of RM7.55 per kg in April 2018.

The average price of beef was at RM31.89 per kg in April 2019, which is 133 sen cheaper than it was during the same period, a year ago.

Economy