Malaysia: Malaysia’s approved investments in the first quarter of 2025 (1Q 2025) underscored the country’s economic resilience and continued attractiveness as an investment destination, despite ongoing global uncertainties, economists said.

According to BERNAMA News Agency, Malaysia recorded a total of RM89.8 billion approved investments in 1Q 2025, marking a steady 3.7 per cent year-on-year increase. Foreign investments contributed RM60.4 billion, and domestic investments accounted for RM29.4 billion.

International Islamic University Malaysia (IIUM) associate professor of economics, Dr Muhammad Irwan Ariffin, highlighted that the outcome reflects Malaysia’s position as a favourable destination for international investors, citing its strategic location, robust infrastructure, and investor-friendly policies. He noted that foreign investors are drawn to Malaysia’s skilled workforce, stable economic environment, and access to key markets in Asia, such as ASEAN and China. This heavy reliance on foreign investments underscores the confidence global investors have in Malaysia’s long-term economic prospects, particularly in high-value sectors like electronics, digital services, and clean energy.

Muhammad Irwan mentioned that sectors such as technology and digital economy, renewable energy, electronics and semiconductors, healthcare, logistics, and e-commerce are expected to drive sustained investments in Malaysia in the coming quarters, despite global trade tensions. Juwai IQI global chief economist Shan Saeed emphasized Malaysia’s ability to secure nearly RM90 billion in approved investments in the first quarter amid a volatile global backdrop, marked by trade tensions and geopolitical uncertainty, underscoring its enduring investor appeal. He added that the 3.7 per cent year-on-year growth in investments, with foreign direct investment accounting for the lion’s share, affirms the nation’s credibility as a stable, high-potential investment destination.

However, Shan noted that headwinds such as US-China trade frictions and protectionist tendencies could strain supply chains and temper external demand. He suggested that positioning Malaysia as a neutral, high-efficiency ASEAN hub will be key to navigating global turbulence while preserving long-term growth momentum. Malaysia continues to remain on the global investor’s radar.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid remarked that the rise in approved investments suggests that the appetite for investment among private firms remains intact despite the US-China trade tensions. He highlighted the establishment of the Johor-Singapore Special Economic Zone (JS-SEZ) in January 2025, which resulted in significant investments from Singapore, totalling RM28.3 billion. Johor recorded the highest share of approved investments, emphasizing the potential of JS-SEZs to catalyse regional economic integration and stimulate spillovers, particularly in the construction and data centre industries.

However, he cautioned that lingering uncertainty over ongoing US tariff negotiations could weigh on business sentiment and delay future investment flows. The outcome of these talks will be closely watched as the outlook for the second half of 2025 looks increasingly challenging amid the world awaiting the outcome of tariff negotiations.