Malaysia secures RM92.8bil investments in Q1, Japan leads foreign inflows

KUALA LUMPUR: Malaysia continues to attract investor confidence despite global uncertainty, securing RM92.8 billion in approved investments in the first quarter (Q1) of 2026 with Japan emerging as the largest foreign investor.

The approved investments - spanning 1,249 projects across the services, manufacturing and primary sectors - are expected to create 50,226 jobs.

This was a 46.7 per cent increase from the same period last year, highlighting stronger employment impact from new investments, according to the Malaysia Investment Developtment Authority (MIDA).

Although total approved investments were marginally lower than RM93 billion in Q1 2025, the latest figures underline Malaysia's resilience amid geopolitical tensions and shifting global economic conditions.

MIDA chairman Tengku Datuk Seri Utama Zafrul Abdul Aziz said the performance reflected the country's growing ability to attract technology-driven and high-value investments.

"Malaysia's Q1 2026 investment performance sends a clear signal that our economic fundamentals remain strong. Global and domestic investors continue to place confidence in this nation," he said.

Japan topped foreign investment sources with RM21.5 billion, a sharp increase from RM1.6 billion a year earlier. This was followed by China and the United States with RM10.1 billion each, Singapore (RM6.7 billion) and Thailand (RM2.5 billion).

MIDA said 93.6 per cent of Japanese investments approved during the quarter were channelled into digital transformation activities, reinforcing Malaysia's position in high-technology and digital supply chains.

Selangor led approved investments with RM33.5 billion, followed by Johor and Kuala Lumpur at RM16.9 billion each, Penang (RM6.2 billion) and Sarawak (RM4 billion).

The services sector remained the key investment driver, accounting for RM60.8 billion or 65.5 per cent of total approvals.

Information and communications led the segment with RM38.9 billion, driven by demand for artificial intelligence (AI), cloud computing and data centres.

Data centre and cloud investments alone accounted for RM34.6 billion across 33 projects, reflecting Malaysia's growing role as a regional digital infrastructure hub.

The manufacturing sector attracted RM24.1 billion across 501 projects, with electrical and electronics, chemicals, machinery and equipment among the top contributors.

Despite a lower investment value compared with last year due to a large one-off project in Q1 2025, the number of approved manufacturing projects rose 142 per cent.

The sector also remained the largest job creator, generating 30,468 expected jobs, with 17.9 per cent offering salaries above RM5,000 monthly.

Meanwhile, the primary sector recorded RM7.9 billion in approved investments, driven by oil and gas projects, particularly in Sarawak.

MIDA chief executive officer Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid said Malaysia's strong implementation track record remained a key attraction for investors.

Between 2021 and February this year, 85 per cent of approved manufacturing projects had reached various implementation stages, reflecting confidence in Malaysia's investment ecosystem.

MIDA is currently facilitating RM38.3 billion worth of potential projects, while discussions are ongoing for another RM91 billion in possible investments.

The agency said Malaysia remains well-positioned for long-term growth, supported by strong pipelines in semiconductors, AI infrastructure, renewable energy and advanced medical technology.