KUALA LUMPUR: Malaysia's current account (CA) surplus in the fourth quarter (Q4) of 2023 dropped to RM300 million or 0.1 per cent of the gross domestic product (GDP) on wider deficit in primary account due to larger outflows in investment income.
Maybank Investment Bank (IB) noted that the goods account sustained the surplus during the quarter while the services account deficit narrowed on higher travel receipts.
Wider income account deficit stood at RM23.2 billion, as primary income outflows rose on larger net outflows in direct and portfolio investment income amid steady secondary income outflows of RM2.3 billion.
The surplus in goods trade account narrowed slightly to RM30.8 billion while services deficit was smaller at RM7.4 billion, on larger travel surplus reflecting tourism recovery amid sustained deficits in transport and other business services accounts.
It added that the International Investment Position (IIP) report for Q4 2023 showed that the foreign direct investment (FDI) stocks in Malaysia at the end-Q4 2023 totalled RM926.3 billion.
Services sector remained as the largest sector accounting for 50.6 per cent of total FDI stocks – led by financial and insurance services (24.1 per cent of total FDI stocks) and other services (15.1 per cent of total FDI stocks), followed by manufacturing at 42.2 per cent of total FDI stocks at end-4Q 2023.
"By country, Singapore is still the largest source of FDI for Malaysia with 22.4 per cent share of total FDI stock at end-2023. European Union (EU) stayed as the second largest source of FDI for Malaysia, accounting for 12.6 per cent of total FDI stock, led by the Netherlands at 5.4 per cent share of total FDI stock. This is followed by Hong Kong (12.2 per cent of total), USA (10.5 per cent) and Japan (10.2 per cent).
China's share of FDI stock in Malaysia remained unchanged at 3.7 per cent in Q4 2023.
Meanwhile, the stock of Malaysia's direct investment abroad (DIA) increased to RM662.8 billion as at end-2023, with Singapore being the largest recipient of Malaysia's DIA with 22.6 per cent share. Maybank IB maintained its full year 2024 CA surplus at RM40 billion or 2.1 per cent of GDP as it forecasted rebound in exports goods and services amid the global technology recovery cycle.
It also noted further pick up in the tourism industry will boost travel receipts in the services account as tourist arrivals are expected to return to pre-pandemic level this year.