Research house sees Malaysia going through investment upcycle

KUALA LUMPUR, Aug. 5 (Xinhua) — Malaysia is going through a third investment upcycle as gross domestic product (GDP) share of the combined private and public investments picked up to 21.3 percent as of first quarter of 2024 from 19.7 percent in 2022, a research house said Monday.
Maybank Investment Bank said in a note that Malaysia’s investment is on the upswing as robust private sector investment approved since 2021 are being realized as per the trend in actual private investment.
It noted that rising momentum in investment realization is also seen from the surges of imports of capital goods — especially machinery and transport equipment, as well as the accelerating banking system’s loans growth for industrial buildings, factories, land, construction and working capital.
Maybank sees tangible evidence of policy execution and implementation, especially fiscal consolidation and reforms, Johor-Singapore Special Economic Zones (JSSEZ) and the push for green energy (renewable energy) sector and tech industry.
It also sees five drivers or themes in the current wave of investment upcycle, namely green investment, technology, JSSEZ, infrastructure and government linked investment.
According to the research house, Malaysia’s first investment upcycle saw gross fixed capital formation’s share of GDP surged from the low of 22.1 percent in 1987 to the peak of 49.2 percent in 1997.
Meanwhile, the second investment upcycle raised total investment to GDP share to a high of 26.6 percent in 2013 from the low of 21.7 percent in 2009. ■