Malaysia: Approved Investment collapses in Q1 – UOB

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting assessed the latest investment figures in Malaysia during the January-March period.

Key Quotes

“Total approved investment fell 34% y/y to MYR37.4bn in 1Q20 amid the COVID-19 pandemic. Manufacturing investments led with MYR25.2bn (67.5% of total) worth of investments approved. Approved investments in services and primary sectors plunged to MYR11.9bn and MYR0.3bn respectively (31.7% of total and 0.8% of total) in 1Q20.”

“Manufacturing investments approved were mainly from domestic sources (MYR14.6bn or 58% of total manufacturing investments). By sector, investments were focused in petroleum products (including petrochemicals) and electrical and electronics.”

“Given the lingering downside risks and uncertainties due to the effects of COVID-19 and the Movement Control Order (MCO), the sum of full-year investment approvals are expected to halve to MYR100bn (from MYR211bn in 2019). A slower pace of project materialisation will also indicate tepid real private investment growth for 2020, which we forecast a 12.0% decline (BNM forecast: -9.7%; 2019: +1.5%).”