Record FDI in 2023 shows the world is still confident in Malaysia, says Anwar

KUALA LUMPUR, Feb 24 — Malaysia recording its highest-ever approved investments of RM329.5 billion last year showed that global investors remained confident in the country, said Prime Minister Datuk Seri Anwar Ibrahim.

Anwar, who is also the finance minister, said although the ringgit’s performance was currently weak, Malaysia’s unemployment and inflation were declining.

“If the world does not have confidence in investing in Malaysia, our investment level will surely be at a slow rate. The world and investors have confidence that we recorded the highest ever approved investment. Inflation is down, and unemployment is also down,” he said in his speech during the launch ceremony of Restu Global Quranic Arts Festival at Nasyrul Quran, Kompleks Percetakan Al-Quran, Presint 14, here.

Anwar acknowledged the ringgit’s decline against the US dollar, but said this could be mitigated by also trading in other currencies.

“Yes, this problem needs to be solved, but that is against the US (dollar), what is our step? Our biggest trade is with China, about 25 per cent or RM250 billion. With Indonesia 18 per cent and Thailand 20 per cent. When we trade in local currencies, in ringgit and baht, for example, the issue of the dollar is not affected.

“What we worry about is that when the ringgit is down, economic growth stunts, and no investment comes in, but that’s not the case.

“All numbers show that we are on the right track,” he said.

The Malaysian currency slid close to its lowest level last seen during the Asian Financial Crisis in 1998 on Thursday, which the Opposition have used as fodder to drive public criticism towards the Anwar government’s economic policy.

However, Anwar yesterday rebuffed his critics who compared the current situation to 1998, saying they were different as inflation and unemployment had been high during the AFC.

Malaysia’s FDI increased to RM926.3 billion at the end of the fourth quarter of 2023 compared to RM914.9 billion the third quarter of last year, according to official data released last week.

The ringgit fell 0.3 per cent against the dollar last Wednesday, the weakest level since 1998 when it dropped to as low as 4.885 against the greenback.

Economists have attributed the decline to China’s sluggish growth, which has hurt Malaysia’s exports.

BNM said in a statement issued Wednesday amid a growing polemic over the foreign exchange rate that the ringgit’s performance does not reflect the country’s economic strength.

BNM governor Datuk Abdul Rasheed Ghafour said the ringgit’s decline follows similar trends with other regional currencies, which he attributed to external factors like market adjustment to changing US interest rates and uncertainty around China’s economic prospects.

The central bank said it expects the ringgit to rebound this year as demand for Malaysian exports improve.

Yesterday S&P Global Ratings forecast a 9 per cent rebound in the Malaysian currency by the end of the year, adding that the weak currency did not pose a risk to the sovereign rating.