Malaysia’s $44.8 billion approved investments spark optimism of new record

KUALA LUMPUR, Malaysia (MNTV) – Malaysia’s approved investment performance in the first half of 2025 has sparked optimism about surpassing last year’s record, reports the Business Times. 

With 190.3 billion Malaysian ringgit ($44.8 billion) in approved investments secured in the first half of 2025, Malaysia is already past the halfway mark toward last year’s record-breaking 378.5 billion Malaysian ringgit ($88.6 billion).

Malaysian Investment Development Authority (Mida) said a total of 3,011 projects across the manufacturing, services and primary sectors are expected to generate 89,294 new jobs.

The services sector led with approved investments across 2,476 projects. The manufacturing sector followed with 518 projects, driven mainly by foreign investments (78%).

Singapore emerged as the leading source country, followed by China, the United States, the British Virgin Islands and Italy.  

Economists said sustaining the momentum through the rest of the year will hinge on converting pipeline projects into firm commitments amid a volatile global environment.

Dr Mohamad Idham Md Razak said investment approvals, particularly for large-scale projects, are seldom evenly distributed across quarters and can be subject to significant volatility based on a handful of mega-deals.

“The crucial factor will be whether the pipeline of prospective investors, cultivated by agencies like Mida and Investment, Trade and Industry Ministry, continues to materialise into firm commitments at a similar or accelerated pace, amidst a potentially fluid global economic landscape,” he told the Business Times.

Idham said Malaysia’s investment outlook will be shaped by the direction of global interest rates and economic conditions in major foreign direct investment (FDI) source countries, as well as domestic readiness to leverage supply chain diversification trends.

“Concurrently, the escalating geopolitical fragmentation and the ongoing pursuit of supply chain resilience (friend-shoring or China+1 strategies) present a significant domestic opportunity for Malaysia to position itself as a stable, neutral and competitive manufacturing hub.”

AI boom and National Semiconductor Strategy

Economist Doris Liew, who specialises in Southeast Asian development, said Malaysia’s investment momentum is buoyed by optimism over the Johor–Singapore Special Economic Zone. 

This is further reinforced by major policy initiatives such as the NIMP 2030 and the National Semiconductor Strategy.

She added that the forthcoming National AI Action Plan is expected to sharpen this edge, especially in the digital economy, where artificial intelligence (AI)-driven demand is set to supercharge investment flows.

“The AI boom will inevitably intensify demand for semiconductor chips and the country’s robust outsourced semiconductor assembly and test (OSAT) segment and data centre will see increased demand.”

Sunway University economics professor Dr Yeah Kim Leng said ongoing uncertainties over Trump’s tariff policies have led multinational companies, including US-based ones, to pause and reassess their investment decisions.

He said Trump’s weaponisation of tariffs is aimed at reshoring manufacturing industries and jobs, reducing imports and increasing investments in the US.

Consequently, global investment decisions have been upended as the different tariffs secured by trading partners including Malaysia will result in changes to global production patterns and supply chain reconfigurations in the long term. 

“Malaysia has also received record investments from global tech companies from the US, China and Europe and this inward FDI particularly for establishment of data centres is expected to slow down in the second half of this year,” he said.