Implementation Lags In Approved Investments Pose Structural Risk - MoF

KUALA LUMPUR, Oct 9 (Bernama) -- Implementation lags between approved investments and their physical execution pose a structural risk to Malaysia’s economic growth, the Ministry of Finance (MoF) said.

The ministry said that although high approved investment figures provide a strong foundation for future economic expansion, approved projects do not necessarily translate into physical private investment.

“Currently, the time-lag dynamics and conversion rates between official approval and actual physical execution call for greater coherence,” MoF said in its Economic Outlook 2027 report released today.

The report’s analysis estimated that a 10 per cent increase in total approved investment could raise private investment by 5.2 per cent, with the impact expected to materialise within six to 18 months.

“This finding supports the lag effect between official approval and physical realisation due to the complexity of projects and implementation procedures,” MoF said, adding that the establishment of the Invest Malaysia Facilitation Centre in 2023 is expected to accelerate the conversion from approval to operation.

Besides that, the ministry said the success of investments should be measured not merely by the amount of capital they bring, but also by their contribution to building lasting domestic capabilities, strengthening technology transfer and innovation sharing, and integrating domestic firms into global value chains.

“Achieving this requires a continued focus on quality investments through strategic policy and sustained investor confidence, alongside targeted public investment, particularly in core infrastructure such as power grids, roads and utilities, which remain essential in emerging areas with strong potential for future economic activity.

“Public and private investment should play complementary roles in sustaining investment activities and generating broad-based economic benefits,” it said.

MoF also said sustaining Malaysia’s private investment momentum will require a more aggressive approach by all investment promotion agencies, with close engagement with relevant authorities and utility providers to expedite project execution and resolve regulatory bottlenecks.

“Moving forward, economic success will depend not only on the volume of investment secured, but also on how effectively the nation transforms investment into resilient growth and greater socio-economic development,” the ministry added.

-- BERNAMA