Budget 2025: A Strategic Investment Proposition to Propel Malaysia Forward

Key takeaways:

The Madani Government's proposed Budget 2025 demonstrates its commitment to achieving three strategic imperatives: stimulating economic growth, aggressively attracting foreign and domestic investments, and adhering to the fundamentals of fiscal discipline.

The introduction of the Investment Incentive Framework (IIF2025) in Budget 2025 marks a transformative step to revolutionise Malaysia's investment landscape, aligned to InvestKL’s focus on attracting modern services investments in areas such as Artificial Intelligence (AI), robotics, IoT, data science, and FinTech. With a robust RM1 billion strategic investment fund and innovative measures to strengthen local supply chains, including tax breaks for multinational companies (MNCs) and support for local industries, Malaysia is set to become a top investment destination.

The above framework will not only generate high-skilled executive jobs but will advance Malaysia's economic transformation agenda. Subsequently, the focus on high-skilled job creation and the upskilling and reskilling the local talents is set to attract global multinational companies to invest in Malaysia, thus fortifying the nation's economic prowess.

Meanwhile, Budget 2025’s emphasis on digitalisation and integrating AI across all sectors will be a double-edged sword—fuelling growth and enhancing the country's ambition of becoming a fully digital-enabled nation.

KUALA LUMPUR, 22 OCTOBER 2024: Malaysia's investment landscape is set on an upward trajectory, as evidenced in Budget 2025. The nation's economic outlook is exceptionally promising—with the bullish performance of Bursa Malaysia and GDP growth anticipated to exceed initial projections of 4.5% to 5.5%—signalling a thriving economy for astute investors.

This favourable economic climate is further bolstered by Malaysia's commitment to creating a business-friendly regulatory environment and implementing robust investment policies.

Fortifying Malaysia’s Investment Landscape

The integration of IIF2025 with InvestKL’s guiding frameworks—the New Industrial Master Plan (NIMP 2030), the 12th Malaysia Plan, and the Madani Economy Framework—will bolster efforts to attract high-value investments from MNCs.

Datuk Muhammad Azmi Zulkifli, CEO of InvestKL, said, “Budget 2025 is a comprehensive and forward-looking plan to accelerate Malaysia's economic growth. The introduction of IIF2025 prioritises emerging sectors and reskilling the workforce to meet industry demands, aligning with InvestKL’s mission to draw high-quality investments in the modern services sector. As Malaysia prepares to chair ASEAN in 2025 and explores joining BRICS, Budget 2025 positions the nation and Greater Kuala Lumpur to seize global opportunities, further solidifying their standing in the international investment landscape."

Simultaneously, targeted fiscal measures and incentives in Budget 2025 will accelerate key sectors, including green technology, digital economy, and advanced manufacturing.

These initiatives align with the government’s overarching goal to transform the economy toward higher value-added industries, ensuring sustainable and inclusive growth.

Through policy continuity and strategic investments, Budget 2025 aims to strengthen investor confidence and reaffirm Malaysia’s competitive edge in the global market. The budget also seeks to cultivate an investment-friendly environment that fosters foreign direct investments (FDIs).

Budget 2025 also introduces measures aimed at improving infrastructure, streamlining regulatory processes, and nurturing skilled talent—all essential for attracting global businesses.

Expanding the Modern Services Sector

Budget 2025 places a significant emphasis on expanding Malaysia's modern services sector, a move set to profoundly impact the rakyat's economy. This initiative is designed to foster knowledge transfer, elevate high-value activities, and integrate cutting-edge technologies. These measures are critical in advancing Malaysia’s roadmap towards becoming a high-income nation by 2028. By strengthening local capabilities and attracting MNCs, Budget 2025 plays a crucial role in driving Malaysia’s economic transformation and long-term growth.

The service sector expansion aspires to create a spillover effect and nurture a collaborative ecosystem throughout the country. As more services-based businesses emerge and existing ones grow, they will create new job opportunities across multiple skill levels.

Additionally, productivity stands out as another key benefit of the service sector expansion. Modern services defined as activities leveraging technology and innovation, often demonstrate higher productivity levels than traditional ones.

Catalysing High-Skilled Job Creation
The recent influx of FDIs is poised to be a catalyst for the creation of high-skilled jobs across diverse sectors. The influx is not just a financial boon; it is a transformative force that will significantly elevate the quality of employment opportunities available to Malaysians. As these high-skilled jobs proliferate, they will infuse the nation’s economic engine with new vigour, driving growth and innovation.

This development is more than an economic stimulus; it is a strategic enhancement of the labour market. The creation of high-skilled jobs will accord the rakyat with opportunities to engage in more specialised, knowledge-intensive work. This shift is expected to cultivate a more dynamic, competitive, and resilient economy.