Malaysia Q2 FDI Inflows Fall to One-Year Low

Malaysia’s foreign direct investment (FDI) inflows dropped sharply to MYR 7.4 billion in Q2 2026 from MYR 22.8 billion in the previous quarter, marking the lowest level since Q2 2025. The sharp quarterly drop suggested that Malaysia’s FDI performance remained vulnerable to a more cautious global investment environment. By sector, FDI was mainly channelled into services, particularly the information & communication subsector, while manufacturing and construction were the next-largest recipients. Investment was led by China, Hong Kong and Singapore.

Malaysia’s foreign direct investment (FDI) inflows eased to MYR 22.81 billion in Q1 2026 from a record MYR 26.64 billion in Q4, though inflows remained relatively solid despite ongoing external uncertainty. The decline mainly reflected softer capital inflows through debt instruments, particularly loans received from abroad, although this component continued to account for the largest share of total FDI. Equity and investment fund shares also contributed to inflows. By sector, the services industry attracted the bulk of foreign investments, led by the information and communication subsector, as demand for digital infrastructure and technology-related activities stayed firm. Mining and quarrying, alongside construction, were the next largest recipients of foreign capital. In terms of source economies, Singapore remained the leading investor, followed by China and Hong Kong.

Malaysia’s foreign direct investment (FDI) inflows surged to a record MYR 27.82 billion in Q4 2025, sharply higher than MYR 8.47 billion in the previous quarter, underscoring a strong rebound in investor confidence. Inflow was mainly directed to the services sector, particularly information & communication and financial activities, followed by the manufacturing sector. The top sources of FDI were Singapore, Hong Kong, and China. For the full year, FDI inflows increased to MYR 53.46 billion, up from MYR 51.53 billion in 2024, reflecting sustained foreign interest despite global economic uncertainties.