KUCHING: Malaysia’s economy may be holding steady with growth forecast at up to 4.8 per cent this year, but lasting resilience will depend on reforms that turn investment into real, shared progress, said Farhana Ismail.
The Universiti Malaysia Sarawak (UNIMAS) senior lecturer said growth projections of 4 to 4.8 per cent, outlined in Bank Negara Malaysia’s Economic and Monetary Review, are encouraging given global trade uncertainties.
This momentum, she added, is underpinned by strong domestic demand, a services rebound and investment inflows.
“According to the Malaysian Investment Development Authority (MIDA), Malaysia attracted RM190.3 billion in approved investments in the first half of 2025, an 18.7 per cent increase compared with the same period last year.
“The majority came from services at 62.3 per cent, followed by manufacturing at 36.0 per cent and the primary sector at 1.7 per cent. These numbers reflect not only more investment activity but also a shift toward higher-quality projects in services and high-value manufacturing,” she told Sarawak Tribune in her Malaysia Day message.
She stressed that growth must be shared across the federation, especially for Sabah and Sarawak.
She said the Sarawak–Sabah Link Road (SSLR) Phase 2 and the Pan Borneo Highway are more than just infrastructure projects.
“These projects will transform connectivity, reduce travel costs and open new opportunities for rural communities.
“Together they symbolise inclusion and bridge the gap between rural and urban areas, ensuring that Sabah and Sarawak share fully in the nation’s growth story,” she said.
While the outlook is positive, she stressed that global headwinds and trade tensions remain a threat.
Institutions including the IMF and Bank Negara, she said, have already made clear that credibility and consistency are essential.
“Clear rules, consistent policies and a steady hand in managing the economy will be critical. Malaysia Day is therefore more than just a celebration. It is a reminder that resilience must be matched by credible action to ensure our growth story continues,” she said.
Farhana said reforms should focus on productivity, investment quality and workforce readiness.
She pointed to education and skills development as central.
“Investment in education, technical training and lifelong learning must remain a priority so that workers are ready for technological change.
“Strengthening early childhood education, vocational training and aligning TVET with industry needs will help build a workforce that can adapt to new technologies.
“At the same time, we must also prepare for the challenges of artificial intelligence and automation, which will reshape the job market,” she said.
She added that reforms should also strike a balance between digitalisation and labour-intensive sectors.
“Sectors such as semiconductors and green energy can push Malaysia up the global value chain.
“At the same time, industries like agriculture, tourism and selected services should remain more labour-intensive to provide employment opportunities, while adopting appropriate technologies to make work safer and more efficient,” she said.
She also highlighted the need for a predictable and efficient investment climate to sustain momentum.
Streamlined regulations and consistent policy, she said, are vital to attracting quality foreign investment and ensuring smaller firms are not left behind.
“Small and medium-sized enterprises must be supported in adopting digital tools and automation so they can scale and compete effectively,” she said.
Future-oriented reforms are also needed to ensure competitiveness is sustainable.
She called for investment in green infrastructure, logistics and the energy transition, alongside a more flexible labour market that still protects workers.
“Labour markets should become more adaptable while maintaining social protection, so workers can retrain and move into higher-value roles without being left behind,” she said.
She noted that these priorities are already embedded in national and regional plans.
“The 13th Malaysia Plan emphasises digitalisation, innovation, green growth and reducing inequality.
“They are also reinforced by Sarawak’s Post COVID-19 Development Strategy 2030 and the Sabah Maju Jaya Development Plan.
“Together these strategies show how national reforms can be shaped to local needs,” she said.
Farhana stressed that resilience must always be matched with inclusivity.
She said growth is only meaningful if it improves jobs, wages and opportunities for Malaysians at every level.
“For ordinary Malaysians, progress is meaningful only when it translates into better jobs, higher wages and real opportunities for upward mobility.
“At the same time, SMEs, especially those in rural and underserved areas, need stronger support to digitalise and scale so prosperity is not concentrated only in large urban centres or among established corporations,” she said.
She added that inclusivity also requires tackling regional disparities.
“Investing in infrastructure, digital connectivity and human capital in lagging states can help narrow development gaps and spread opportunity more evenly.
“Growth that is shared more fairly is not only just, it is also politically sustainable, strengthening unity as well as prosperity,” she said.
On government assistance, she said policies must consider every income group.
“While the bottom 40 per cent must remain a priority, the middle class needs policies that ease cost-of-living pressures and support upward mobility, while the top tier can be better engaged through incentives to invest, innovate and create jobs,” she said.
