KUALA LUMPUR (April 3): Malaysia’s private investment grew at 1.5% in 2019 — the slowest pace since 2009 — compared with 4.3% growth in 2018.

The private investment declined significantly by 21.8% in 2009 after the onset of the Global Financial Crisis.  

Bank Negara Malaysia (BNM) said the moderation in private investment is attributable to the heightened uncertainty surrounding global trade tensions that affected business sentiments of both domestic and export-oriented firms. 

Similarly, domestic policy uncertainty arising from the review of infrastructure projects also dampened overall sentiments. 

On the public investment front, it remained in contraction in 2019, further declining by 10.8%, compared to -5% contraction seen in 2018, due mainly to the completion of large-scale projects by public corporations. 

The continued rationalisation efforts by the government, as reflected by the ongoing review of several large-scale infrastructure projects had also contributed to lower spending by public corporations.

Nevertheless, capital expenditure remained supported by Federal Government spending, particularly in the education and housing sectors, BNM said.

Besides, BNM pointed out that the continued weakness in the domestic residential and non-residential property market had also contributed towards the modest investment performance. 

Meanwhile, BNM stated that private investment was supported by the implementation of new and ongoing projects in both the manufacturing and services sectors, in particular, capacity expansions in the manufacturing sector were evident in the resource-based and electrical and electronics (E&E) industries. 

In the services sector, investments benefitted from sustained capital spending in the transport and healthcare services subsectors. Investment intentions also remained positive as reflected by the encouraging investment approvals during the year.

Meanwhile, public consumption expanded at a moderate pace of 2.0%, against 3.3% growth in 2018, as continued growth in emoluments was weighed down by lower government spending on supplies and services. This is in line with the government’s commitment to optimise expenditure without affecting the delivery of public services.

For more stories on BNM's annual report, click here.