Department of statistics: cumulative investment in fixed assets up 2.7 pc to 5.17 t RM in 2020 | Money
KUALA LUMPUR, November 16 – Malaysia’s cumulative investment in property, plant and equipment, or gross capital stock (GKS), increased 2.7% year-on-year (year-on-year) to reach RM 5.17 trillion in 2020, said Malaysia’s Department of Statistics (DoSM).
Simultaneously, the net capital stock (NKS), which represents the wealth of the Malaysian economy, reached a value of 3.22 trillion ringgit last year.
Chief statistician Datuk Seri Mohd Uzir Mahidin said the NKS slowly climbed 1.8% from 3.6% the year before.
He said that from 2018 to today, the value of the national capital stock has grown slowly due to the decline in gross fixed capital formation (GFCF).
âThe slow growth of the capital stock is more visible in 2020, when GFCF fell in double digits to 14.5%.
“This is due to the investment of fixed assets for all economic activities which have been affected by the movement control ordinance which has been implemented over the past year following the Covid pandemic- 19, “he said in a statement today.
Mohd Uzir said the scale of the drop was the worst on record since the Asian financial crisis of 1998.
The impact of the declining capital stock could also be seen in the world’s major economies, including the United States, Japan and the United Kingdom, he said.
He said that on the basis of economic activity, the capital stock for the service sector grew slowly to 2.5% in 2020 from 4.2% the previous year, driven by the transport sub-sectors. and storage, and information and communication which climbed slowly to 0.4%. while finance, insurance, real estate and business services grew 5.8 percent.
The capital stock of the manufacturing sector edged up 0.4% from 3.5% in 2019, influenced by petroleum, chemical, rubber and plastic products and electrical, electronic and optical products which edged up to 0 , 8% and 0.6%, respectively, he says.
Non-metallic mineral products, base metals and fabricated metal products fell 0.8 percent, while textiles and wood products fell 2.6 percent.
As for the mining and quarrying sector, Mohd Uzir said that the capital stock fell to 0.02% in 2020 while the construction sector increased by 4.3% and the agricultural sector gained 1.6%. .
âRegarding the type of assets, the structure remained the main contributor to the capital stock with a contribution of 80.2%, equivalent to RM2.58 billion, supported by other structures and non-residential.
âThe higher asset value of the structure, as well as the longer lifespan compared to other assets, are major factors in the structure’s dominance in the overall value of fixed assets in Malaysia.
This was followed by machinery and equipment with a contribution of 11.4% worth RM368.86 billion, as well as other assets with a contribution of 8.4%, and registered 270, 25 billion RM, “he said.
Mohd Uzir said the country’s asset mix is ââsimilar to the asset mix of other countries, including South Korea and Singapore.
Overall, he said the performance of capital stocks over the past three years had deteriorated, associated with the pandemic that affected overall economic activity.
âThe country’s ability to continue expanding in the future will be disrupted if this slowdown in investment growth is prolonged as it will have a detrimental effect on production capacity.
âInvestments in fixed assets, especially automation-focused assets, must be increased in line with Industrial Revolution 4.0 (4IR) for the country’s transition to a high-income economy,â he said, adding that efforts to reform the investment ecosystem must be taken to ensure sustainable economic growth. – Bernama