At the same time, Malaysia’s Direct Investment Abroad (DIA) also posted a healthy growth of 26.5 per cent to RM26.1 billion in 2019.
Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the encouraging performances of both FDI and DIA show the favourable economic situation in the country that has attracted foreign companies to continue investing and similarly for local companies to expand and diversify their activities abroad.
“Major contributors by country for FDI flows in 2019 were Japan, Hong Kong and the Netherlands,” he said in a statement today.
The higher FDI was mainly due to injection of equity from Japan to Malaysia in health activities, while the foreign inflows were mainly channelled into the services sector, particularly in health, real estate and financial activities.
Meanwhile, the manufacturing sector was the second highest, mainly in the form of debt instruments and equity in refined petroleum and electrical and electronics products, followed by the mining and quarrying sector.
After recording a continuous decline since 2015 due to uncertainty in the global environment and subdued crude oil prices, overseas investment rebounded to RM26.1 billion from RM20.6 billion in the previous year.
Mohd Uzir said Brazil became the top country for DIA particularly investments in the oil and gas industry.
Moreover, Malaysian companies largely invested in the services sector especially in financial activities, followed by the manufacture of electrical and electronics and non-metallic mineral products.
Additionally, he said the accumulated FDI in Malaysia increased to RM691.6 billion as at end-December 2019, while the accumulated overseas investment stood at RM485.4 billion.
From the accumulated investments in 2019, the income received by FDI companies was higher than the DIA, resulting in higher profits earned by foreign companies in Malaysia.
“Comparatively, foreign investors in Malaysia gained RM0.08 for every RM1.00 of investment, while Malaysian companies received RM0.06 for every RM1.00 invested abroad,” said Mohd Uzir.
The manufacturing sector benefited the most from FDI while the oil and gas sector gained the most from the DIA.
He also stated that since 2016, FDI in the sector services outpaced the manufacturing sector predominantly in financial activity.
“Moving forward, with the unprecedented COVID-19 pandemic that caused economic uncertainty worldwide, FDI is expected to be on a subdued trend for 2020,” he said.
Nevertheless, he noted, industries such as healthcare, pharmaceutical, medical and activities related to e-commerce have the opportunity to expand their business although the continuous focus on enhancing the manufacturing sector will widen the spillover effect on the domestic economy.
Local companies should take advantage of these activities by expanding and strengthening their capacities towards high-end technology to gain optimal output supported by business-friendly policies to boost the domestic economy, he said.
“Currently, it is vital to stimulate the local economy as it will spur development with the setting up of businesses and creating more job opportunities for the country,” he said, adding that the acquisition of knowledge from technology transfer is a great advantage to the nation.