Malaysia’s foreign direct investment (FDI) improved in the fourth quarter (Q4) of 2018, registering a larger net inflow of RM12.9 billion from RM4.3 billion in the third quarter (Q3) of 2018.
According to Bank Negara Malaysia’s (BNM) Quarterly Bulletin for the Fourth Quarter 2018, FDI inflow was channelled mainly into the manufacturing and non-financial services sectors.
It said the direct investment account registered a higher net inflow of RM2.1 billion compared with a net inflow of RM0.5 billion in Q3 2018.
However, BNM said the financial account recorded a net outflow of RM6.1 billion from a net inflow of RM2.3 billion in Q3 2018.
“This was due to higher net outflows in the portfolio and other investment accounts, which more than offset the net inflows of direct investment during the quarter,” it said.
Meanwhile, direct investments abroad (DIA) by Malaysian companies recorded a higher net outflow of RM10.8 billion in Q4 2018 against a net outflow of RM3.8 billion in the previous quarter.
DIA outflows were channelled primarily into the mining and non-financial services sectors.
The portfolio investment account registered a net outflow of RM5.8 billion from a marginal net inflow of RM1.0 billion in Q3 2018.
“This reflected a turnaround in residents’ portfolio asset transactions, following higher purchases of equity securities abroad,” said BNM.
Non-residents recorded a smaller outflow of portfolio investments, amounting to RM2.5 billion compared with a net outflow of RM3.6 billion in Q3 2018.
BNM said this was due to a net liquidation of equity securities, amid heightened global financial market volatility.
The other investment account recorded a net outflow of RM1.8 billion from a net inflow of RM1.0 billion in Q3 2018.
“This was attributable to outflows following the maturity of interbank deposits within the domestic banking sector and trade credits, which were partly offset by the inflows from the maturity of currency and deposits and the repayment of trade credits to the private sector,” it said.
Net errors and omissions amounted to -RM10.8 billion, or -2.2 percent of total trade.
The international reserves of BNM amounted to US$101.4 billion as at end-December 2018, compared with US$103.0 billion as at end-September 2018.
Economy grew 4.7 pct in 2018
Meanwhile, according to the Statistics Department, Malaysia’s economy grew at 4.7 percent in 2018 with a gross domestic product (GDP) value of RM1.23 trillion at constant prices and RM1.43 trillion at current prices.
Chief Statistician of Malaysia, Mohd Uzir Mahidin said the country recorded a better performance in the fourth quarter (Q4) with a growth of 4.7 percent after the moderation of two consecutive quarters in 2018.
““All key sectors recorded positive growth, except for agriculture, with favourable performance mainly contributed by services and manufacturing sectors, whereas mining and quarrying rebounded in this quarter,” he said in a statement today.
He also said that growth of demand was led by private final consumption expenditure and net exports.
Mohd Uzir informed that the private final consumption expenditure (PFCE) expanded 8.5 percent, driven by consumption on food and non-alcoholic beverages, communications, restaurants & hotels and transport.