Miti maintains investment growth projection at 5% for 2024, says Tengku Zafrul
The Investment, Trade, and Industry Ministry (MITI) maintains its 5.0 percent investment growth projection for this year, despite the domestic economic recovery environment.
Presenting the ministry’s second-quarter report card on Thursday (July 18), Minister Tengku Datuk Seri Zafrul Abdul Aziz said this target aligns with the GDP growth goal set by the Malaysian Investment Development Authority (MIDA), and highlighted the digital and green economy sectors, along with the services sector, as key drivers of future growth.
Addressing the impact of the strengthening ringgit, Tengku Zafrul noted that it is not the sole indicator for investors, who prioritise long-term prospects and reliability.
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Presenting the ministry’s second-quarter report card on Thursday (July 18), Minister Tengku Datuk Seri Zafrul Abdul Aziz said this target aligns with the GDP growth goal set by the Malaysian Investment Development Authority (MIDA), and highlighted the digital and green economy sectors, along with the services sector, as key drivers of future growth.
Addressing the impact of the strengthening ringgit, Tengku Zafrul noted that it is not the sole indicator for investors, who prioritise long-term prospects and reliability.
Read more at https://tinyurl.com/4x5629uy
WATCH MORE: https://thestartv.com/c/news
SUBSCRIBE: https://cutt.ly/TheStar
LIKE: https://fb.com/TheStarOnline
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NewsTranscript
00:00In the first quarter, we have announced an increase of 13% compared to the first three months of last year.
00:08CEO Maida is here. Maybe he can give a comment on the increase.
00:19His target is 5% compared to last year.
00:25Last year, it was 329.5 billion ringgit.
00:31He wants to increase it to 5%. But in the first quarter, it was already 13%.
00:35So, what should we do?
00:44The 5% is based on the correlation with our GDP.
00:56Although I think it's a very conservative target, so that they can achieve the target.
01:03But it's okay, we'll see.
01:15The second question is about the ringgit.
01:20Actually, there are two concerns when it comes to the ringgit.
01:25One is that it will go up, and the other is that it will go down.
01:29Let's say I want to invest in Malaysia.
01:34In the stock market, the capital market is different.
01:37Because I can buy the shares straight away, I can buy the bonds straight away.
01:40And then if the currency strengthens or weakens, straight away I'll get impacted.
01:44And then my dividend, income, etc.
01:49So, this is where I'm talking about the two colors of FDI.
01:52The two things that they will be looking at.
01:55One is because when they decide to put in money,
01:59it will take one year for the data center to speed up.
02:03But mostly, it's two to two and a half years.
02:06So, within that two and a half years, of course, if that ringgit is not as strong,
02:11they benefit.
02:13Because they are investing in Malaysia, so their cost of construction and all that,
02:17is okay, will be lower.
02:19In fact, if you look at the labor costs, etc.
02:22However, they have to bring in the machines.
02:26That is in dollars.
02:28So, then that will be offset by that.
02:30But it is a long term, it's two and a half years.
02:33So, the fluctuation, if it's over two and a half years, it drops 10%,
02:38of course, it will be a concern.
02:40Because most of the factories, there will be some cost in ringgit,
02:45some cost in US dollar.
02:47So, net-net, usually, depending on the type of industries.
02:52If the industry uses a lot of imported goods, in terms of machinery,
02:56yes, they will be impacted.
02:59But, having said that, this will all be offset by the export.
03:03Because the export is in the US dollars.
03:06So, therefore, when I talk to foreign investors,
03:11who are doing business here,
03:16if they export, they are not too worried.
03:19Because their export is in US dollars.
03:22So, in net-net, they are actually benefiting.
03:25That's why we can see that our trade surplus actually helps.
03:30Because we export more than we import.
03:34So, they will be good.
03:36But, this is not the same for the capital market.
03:39But, for FDI, for long-term investment, the answer is yes.
03:44Because they still export in US dollars.
03:50What they don't want to see is too much volatility.
03:55What they want to see is stability, but within a certain range,
03:59is acceptable to them.
04:02So, the digital and green will be key drivers of the economic growth,
04:06when you look at the sectors, apart from the service sector.
04:08Because the service sector continues to be the key driver of economic growth.
04:12I think digital economy is about 20 plus percent.
04:1520, 23.
04:1925 has surpassed.
04:21Our target is 25 percent of GDP.
04:26Our target is 25.5 percent of GDP by the year 2025.
04:32But, we have surpassed that target for digital.
04:37For green, I'm not sure what the numbers are.
04:40Because it covers quite a lot of sectors.
04:50The target for green is 305 billion by 2030.
04:54But, what is it in terms of GDP now?
04:58We haven't calculated yet for the green.
05:02The defined green is quite broad.
05:04But, digital is the target.
05:09My digital target is 25.5.
05:20So, target is 25.5 by 2025.
05:24Now, we are at 23.
05:26Now, we are at 23.
05:28The original target is 22.6 percent by the year 2025.
05:38But, we have surpassed that target to 25.
05:41Now, we are at 23.
05:46So, off KDNK.
05:54Thank you.