KUALA LUMPUR: Foreign direct investment (FDI) in Selangor is expected to be reduced by half this year to RM8.5 billion compared with RM17 billion last year due to weak global economic sentiment.
The FDI target is a downward revision from the state's earlier forecast of RM12 billion in five main sectors, including electrical and electronics, food and beverages, and machinery.
Selangor Senior executive councillor and chairman of the Standing Committees for Investment, Industry and Commerce, and Small and Medium Enterprise Datuk Teng Chang Khim said the revised target is in line with global sentiment due to the COVID-19 pandemic, during which countries globally are witnessing the same trend.
"As of June 30, the Malaysian Investment Development Authority (MIDA) has approved a total of RM3.3 billion worth of investment in Selangor.
"We hope to have an approved investment of RM8.5 billion by year-end," he said.
Teng added that even though the target is lower than expected, it is relatively well due to the existing market conditions.
"With three months of Movement Control Order (MCO) in place previously, and the current conditional MCO (CMCO) for the whole state of Selangor, we do not know what lies beyond us for now," he said.
Teng said the state government is also unable to forecast the outlook for 2021, as uncertainty continues to linger.
"The CMCO will surely leave some impact. Our gross domestic product (GDP) forecast will be adjusted by another contraction of 4.4 per cent, which is a negative growth," he said.
However, he said the CMCO restricts activities rather than movement.
"All businesses and economic activities are still allowed to be carried out. I hope this will minimise the impact on economic development," he said.
Earlier, Teng launched the virtual Selangor International Business Summit 2020, which is divided into three categories, namely the Selangor International Expo (SIE), Selangor Asean Business Conference, and Smart City and Digital Economy Convention.
"Despite the challenges and less encouraging economic outlook, Selangor continues to take on the role of a regional economic powerhouse as it contributes 24 per cent to Malaysia's GDP annually," he said.
Also present during the virtual launching was Selangor Menteri Besar Datuk Amirudin Shari. - Bernama
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