Malaysia's foreign direct investment (FDI) increased 12.3 percent to RM32.9 billion in 2011 from the previous year, according to Datuk Seri Mustapa Mohamed (pictured), Minister of International Trade and Industry.

FDI in the services sector jumped to RM16.2 billion last year from RM4.1 billion in 2010, with the leading contributors to this sector being real estate.

"This is an encouraging sign despite the uncertainties in the global environment," he said during the released of the 2011 Malaysia Investment Performance Report. The country's positive FDI contributed to last year's 5.1 percent economic growth.

The manufacturing industry accounted for the lion's share of the FDI inflows at 50.1 percent. This was followed by the services industry at 27.3 percent, quarrying and mining at 22.2 percent while the rest came from the forestry, fishing and agriculture sectors.

Meanwhile, Japan was the biggest source of FDI in the manufacturing industry last year, with 77 projects worth RM10.1 billion, an increase of 150 percent from the RM4.0 billion invested in 2010.

Aside from Japan, other leading sources of FDI include the US, South Korea, Saudi Arabia and Singapore. These five countries contributed 66 percent of the total FDI approved by the ministry.

Mustapa expects FDI to increase this year, given the projections of the UN Conference on Trade and Development, in which global FDI inflows are expected to grow moderately this 2012.

Image: NST.com.my

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