Although Malaysia appears to have weathered the worst of the global economic slowdown, indications of a recovery are tentative and clouded by a worrying trend of net foreign investment (FDI) outflows as foreign companies shy from new commitments and local ones seek opportunities abroad.
Malaysian gross domestic product (GDP) contracted 3.9% year on year in the second quarter, an improvement on the 6.2% collapse recorded in the first quarter. With exports representing as much as 120% of Malaysia's GDP, the slump in global demand and commodity prices has taken an especially heavy toll on Malaysian producers.