FDI inflows dropped 56pct in 2020 to RM13.9b

 

Malaysia's foreign direct investment (FDI) fell 56 percent to RM13.9 billion in 2020, a government report said today, as the Covid-19 pandemic hit economic activity globally and in the trade-reliant Southeast Asian nation.

The economy contracted 5.6 percent last year, marking its worst performance since a 7.4 percent fall in 1998 during the Asian Financial Crisis.

The net foreign investment totalled RM13.9 billion in 2020, down from RM31.7 billion the previous year, according to a report published by the Malaysian Investment Development Authority (Mida).

"Malaysia’s lower net FDI inflows in 2020 is not necessarily an unfavourable sign, when taking into consideration the global investment landscape and the uncertainties that prevailed during the year," Mida said in its report.

Foreign investment flows hit negative territory in the third quarter when they fell 0.8 percent, the first time since the fourth quarter of 2009 in the aftermath of the US subprime crisis, according to the report.

Malaysia, however, saw gross foreign investment inflows rise 0.8 percent last year, Mida said.

Mida said the country brought in RM64.2 billion worth of approved foreign investments, primarily in the manufacturing sector, in 2020.

In January, the United Nations Conference on Trade and Development said in a report that foreign investment inflows in Malaysia fell 68% last year, the worst rate in Southeast Asia.

- Reuters