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FDI for 2011 likely to be higher than last year [29-11-2011]  
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Malaysia’s foreign direct investments (FDI) rose 42% to RM26.4bil in the first nine months of 2011 from RM18.6bil recorded during the same period last year.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said this year’s FDI was expected to surpass the RM29.3bil achieved for the whole of 2010.

“Based on the FDI flows for the first nine months, it is likely that this year’s total FDI will exceed last year’s figure,” he said in a statement yesterday. Total FDI in 2009 stood at RM5bil.

Mustapa said the good performance in FDI inflows and private investments for the first nine months of this year indicated that the various initiatives introduced by the Government to spur economic growth were showing positive results.

He said while the FDI inflows for the first and second quarter of 2011 were strong at RM10.1bil and RM11.07bil respectively, it however moderated in the third quarter to RM5.17bil.

“This is partly due to weaker external economic conditions, especially in the eurozone and the United States.”

In terms of private investments, Mustapa said the Government was confident of achieving the targeted RM94bil this year.

“Private investments for the first nine months amounted to RM75bil as announced by the Finance Ministry recently,” he said.

The Government had initially targeted total FDI to hit RM32bil this year.

At the Malaysia-Singapore Business Forum 2011 last week, Mustapa said Malaysia had been blessed in terms of FDI and private investments for this year, despite the economic calamities that had befallen Europe and the United States.

On the outlook for 2012, he said: “Next year, it’s unknown. But with good growth in China, India and Asean, the prospects look good for Malaysia.”

An economist with a foreign-based stockbroking firm said he was cautiously optimistic about the growth prospects for Asia in 2012.

“Asian countries need to look to other Asian markets to withstand the economic crises in the United States and Europe. It needs to look to internal resources to maintain and achieve positive growth. This will be a challenge as the United States and Europe are primary export markets,” he said.

He added that the Asian countries should cater to domestic demand and services in 2012.

“Asia is expected to grow positively next year. We estimate growth to be in mid to high single-digits, spearheaded by China and India,” he said.

In September, Asian Development Bank (ADB) said developing Asia, excluding Japan, Australia and New Zealand, would grow at 7.5% in 2011 and 2012.

However, earlier this month, a senior ADB official described the forecast as “unrealistic,” given the lack of resolution to the eurozone debt problems.

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