“The 4.9% GDP quarterly growth (in Q2) is better than market expectations of 4.7% as compiled by Bloomberg,” he said.
Lim pointed out the stronger than expected Q2 performance convinced Fitch to revise its 2019 GDP growth projection for Malaysia upward to 4.6% from a lowly 4.2%, he said.
The steady economic growth, at a time when various regional economies were experiencing synchronised growth slowdown, also saw an increase in total stock of foreign direct investment (FDI) in Malaysia, he said.
The International Investment Position (IIP) document published by the Department of Statistics Malaysia showed FDI rose by 10.3% to RM667.5bil in Q2 from RM605.1bil 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”.
“Sustained economic growth is one of the reasons behind rising FDI stock,” he said.
The Malaysian Investment Development Authority (MIDA) also showed approved FDI surged in the first half of 2019.
Lim also said the International Investment Position and the Balance of Payments define FDI as lasting investment made by foreign parties into domestic companies giving the former lasting controlling stake.
This adheres to the definition provided by the International Monetary Fund (IMF). It is not only definition available however, and MIDA defines FDI as investment into projects.
Furthermore, approved FDI functions as a leading indicator to actual FDI as defined by MIDA.
Last week, MIDA announced that approved FDI across all sectors rose 97.2% to RM49.5bil in the first half of 2019, from RM25.1bil a year ago.
Specifically, approved manufacturing FDI rose by 74.2% to RM33.1bil in H1 of 2019, from RM19bil a year ago.
Out of the RM33.1bil investment, he said RM11.7bil came from the US, making the US as the biggest source of approved manufacturing FDI during the period.
China was the second biggest source with RM4.8bil while in third place was Singapore (RM3.1bil) and Japan fourth (RM2.1bil).
“MIDA states that the RM33.1bil 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.