Malaysia Foreign Direct Investment (USD bn)

Foreign Direct Investment in Malaysia

GDP growth beat market expectations in Q1 but softened year on year from Q4. Private spending and investment grew at weaker rates, but moderating inflation, stable interest rates and a lower unemployment rate likely prevented larger downturns. Meanwhile, public consumption and exports declined, with the latter plagued by the global tech sector slump. In Q2, GDP growth is likely slowing further: The manufacturing sector weakened for the eighth consecutive month in April, with depressed demand weighing on output and new business. A surprise rate hike in May is likely further stifling domestic activity. Meanwhile, the country’s pensions system is reportedly facing a cash crunch after the withdrawal of about USD 33 billion for Covid-era government stimulus measures in 2020–2022. In May, Prime Minister Ibrahim blocked additional withdrawals, despite opposition calls to extend these measures.