Economist: Foreign investors’ sentiment dampened by long-term uncertainty

19 Mar 2019 / 14:37 H.

KUALA LUMPUR: Long-term uncertainty on government’s policies and political stability will dampen further foreign investors’ sentiment.

“It has come to the stage now where we have to look at how to bring back growth in investments which has been under pressure due to policy changes and uncertainty,” Maybank Kim Eng regional economist Chua Hak Bin said at Invest Malaysia 2019 yesterday.

He said the government should focus on bringing back the economic growth rate back to above 5% by strengthening exports growth, capitalising from the US-China trade war and reviving the tourism sector.

Chua said the Pakatan Harapan government’s focus during the last ten months on cleaning up the balance sheet that includes some changes in policies had resulted in uncertainty among the investors which has hurt the investment numbers.

“I think most industries are pretty convinced that Malaysia is quite resilient (now). So I think the government needs to focus on growth catalysts to drive more investments into Malaysia,” he added.

Meanwhile, Banyan Tree Holdings founder and executive chairman Ho Kwon Ping highlighted that the uncertainty over government policies appear to be the main concern among businesses currently.

“If it (the uncertainty) goes on over a longer period, I think foreign investors’ sentiment is going to decline because there is more and more uncertainty. And I don’t think foreign investors’ community is looking for very radical changes in economic policies.

“In longer-term investments, people would want to see how the situation over the (government’s) succession (plans) is going to end up,” he added.

Last year, Malaysia’s foreign direct investments increased 47.8% to RM80.5 billion from RM54.4 billion in 2017, accounting for almost 40% of the RM201.7 billion total approved investments.

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