05/02/2026

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THURSDAY | FEB 5, 2026

Malaysia enters critical phase of AI nation push o Gobind says national digital agenda will be primary engine for economic growth Ű BY JOHN GILBERT sunbiz@thesundaily.com

Elaborating further, he said, although the equity market recorded an outflow of foreign funds of around US$5.2 billion in 2025, the inflow of foreign funds into the country’s bond market was much larger, reaching US$6 billion. “The overall trend shows that Malaysia remains a stable investment destination. “This can be seen through the continuous inflow of foreign funds into the country’s bond market, reflecting investors’ confidence in the stability of the Malaysian economy,” he said. “January 2026 shows that investor sentiment is positive with both the equity market and the bond market each recording an inflow of foreign funds exceeding RM1 billion.” – Bernama Miti to ensure usage of local products benefits domestic economy KUALA LUMPUR: The Investment, Trade and Industry Ministry (Miti) will focus on outcome based measurement and monitoring under the New Incentive Framework (NIF) to ensure that investment projects using local content translate into real impact on the domestic economy. Its deputy minister, Sim Tze Tzin, said the new approach is aimed at ensuring that commitments to use local products in investment projects – whether foreign (FI) or domestic investments (DI) – are no longer merely declarative in nature. According to him, measuring the actual level of local content usage is currently done via a specific framework that combines quantitative and qualitative indicators, including the percentage of local sourcing for raw materials, components, machinery, and services. “Additionally, the level of local companies’ involvement, including small and medium enterprises in the supply chain, is also a key indicator in assessing the degree of economic spillover domestic industries enjoyed from investments. “The government also evaluates the percentage of local employment created, including aspects of skills upgrading and training, as part of the indicators for monitoring local content,” he said in the Dewan Rakyat yesterday. He was responding to a supplementary question from Wong Shu Qi (PH–Kluang), who sought clarification on the government’s measures to assess the actual level of local content usage in FI and DI investment projects. Sim also said implementation progress of vendor development programmes, as well as efforts to transfer knowledge from investing companies to local firms, are also monitored in stages. “All these indicators are assessed according to sectors, scale of investment, and level of industry maturity to ensure a more realistic and pragmatic evaluation. “Monitoring is carried out at two main stages, during the pre-approval and post-approval phases of investment, with investment projects continuously monitored to assess the progress of the commitments,” he added. For the post-approval stage, the government conducts continuous engagement sessions with investors and local vendors to ensure that the implementation of local content usage genuinely takes place throughout the investment period, he said. Overall, he said, the more structured and meticulous new policy approach aims to ensure that local companies and industries benefit from investments. – Bernama

KUALA LUMPUR: Malaysia is entering a critical phase in its ambition to become a globally competitive artificial intelligence (AI) nation by 2030, as implementation of the National AI Action Plan 2026–2030 begins this year. Digital Minister Gobind Singh Deo said the national digital agenda will be the primary engine for Malaysia’s economic growth, designed to raise productivity, create high-skilled jobs, and attract quality investments that directly benefit every Malaysian. To drive this vision, the government is focusing on six high-impact areas this year to accelerate digital transformation: healthcare, transport, agriculture, SME digitalisation, enforcement, and government services. “By focusing on these areas, we ensure that our digital ecosystem is not just growing but is doing so with purpose and precision. “This vision is centred on transforming Malaysia into a high-income nation and a regional leader in the digital economy. “At the Ministry of Digital, we are committed to ensuring this economy is resilient, inclusive, and future-ready,” Gobind said when officiating Menara Merdeka 118 as Malaysia’s first MD Nexus yesterday. The MD Nexus recognition, under the Ministry of Digital’s MD Location Recognition initiative, led by the Malaysia Digital Economy Corporation (MDEC), accredits strategic locations purpose-built to support digital businesses, services, and innovation. Menara Merdeka 118’s designation as the first MD Nexus reflects its readiness to host high-value digital enterprises through robust infrastructure, connectivity and an integrated ecosystem. Gobind said being an AI Nation is not just about adopting new gadgets but about building a comprehensive ecosystem that

With the digital economy projected to account for 25.5% of Malaysia’s GDP in 2025, Gobind calls on industry players to step forward as partners in this national development. “This year, our focus is to strengthen that momentum while ensuring that Malaysia’s digital ecosystem continues to move up the value chain. “In this spirit, I call upon more industry players to step forward as partners in national development, moving in tandem with economic shifts, accelerating technology adoption, and collectively contributing to the growth of Malaysia’s digital economy,” he said. Menara Merdeka 118 is LEED Platinum-certified and targets Platinum certification under the Green Building Index (GBI), GreenRE, and WELL. Its recognition as Malaysia’s first MD Nexus strengthens its positioning as a future-ready workplace, supported by enhanced technology and digital infrastructure. As part of a wider mixed-use development integrating premium offices, cultural and heritage assets, public spaces and future attractions, Merdeka 118 is positioned as a strategic destination for local and international companies seeking a base in Kuala Lumpur. The launch also sets the foundation for future collaborations and partnerships within Malaysia’s digital ecosystem, reinforcing Menara Merdeka 118’s role as a catalyst for innovation and long-term value creation. It further positions the development as a global hub that enables cross-border collaboration, supports the flow of high value investments, and connects Malaysia’s digital economy with regional and global markets.

integrates infrastructure, talent, and a robust governance framework, led by the National AI Office (NAIO), to ensure Malaysia is a producer of AI technology. “The MD Nexus initiative supports this by recognising strategic locations, like Merdeka 118, that are equipped to serve as hubs for these high-value digital businesses,” Gobind said. MDEC CEO Anuar Fariz Fadzil said the MD Nexus is a strategic step in translating Malaysia’s digital economy vision into tangible, investment-ready environments. The designation of Menara Merdeka 118 as Malaysia’s first MD Nexus status reflects its strong digital readiness, from resilient infrastructure and connectivity to a vibrant ecosystem that supports talent, innovation, and scale-up operations. He said this recognition enables digital companies to immediately plug into a future-ready location that supports growth, collaboration, and long-term value creation, while reinforcing Malaysia’s position as a competitive regional digital hub. “We aim to attract companies to apply for this status because it offers clear benefits to MD Nexus. At this stage, the potential scale of digital investment expected to flow through MD Nexus will only become clear once we have concrete figures, specifically, the number of investors and first movers. “Currently, there are about 50 companies in the pipeline that could participate, and we are closely monitoring those that are applying for this status. “What is important to emphasise is that digital investments coming to Menara 118 are not confined to cyberspace; these are real, physical hubs that demonstrate the significance of digital investments as we move toward becoming an AI-driven nation and building a more robust AI infrastructure,” he said.

Govt expects fiscal deficit to shrink to 3.5% in 2026: Amir Hamzah KUALA LUMPUR: The government expects the country’s fiscal deficit to continue to shrink to 3.5% in 2026, close to achieving the medium-term target of 3% under the Public Finance and Fiscal Responsibility Act (FRA) 2023, reflecting increasingly strong fiscal discipline. and Services Tax and the targeting of subsidies, especially electricity, diesel and RON95,” he said when winding up the debate on the motion of thanks for the royal address for the Ministry of Finance in the Dewan Rakyat yesterday. achievements achieved were the result of the Madani government’s comprehensive approach, including responsible and prudent economic management and efforts to facilitate business to boost growth, investment and trade. KLCI reached 1,771 points on Jan 27, 2026, the highest level in more than seven years,” he added.

He said the world recognised the country’s rise and determination to bring about change as investor confidence and the country’s competitiveness continued to be strengthened. “The performance of the ringgit continues to be strong and reached its best level in almost eight years, at RM3.92 against the US dollar as of Jan 28, 2026, thus maintaining its position as one of the best performing currencies in Asia, reflecting the market’s confidence in the management of the economy and the direction of government policy. “Meanwhile, in the equity market, the FBM

Amir Hamzah said the country’s fiscal reforms were also recognised by international bodies such as the International Monetary Fund (IMF) in its report in December 2025. Along with the fiscal consolidation, he said economic growth exceeded expectations despite facing global economic uncertainties, with Gross Domestic Product growth in 2025 estimated to reach 4.9%, taking into account the initial estimate of growth in the fourth quarter of 2025 which reached 5.7%. Meanwhile, trade also grew strongly by more than six per cent and reached a historical high of RM3 trillion, he said. Amir Hamzah said all the economic

Finance Minister II Datuk Seri Amir Hamzah Azizan said fiscal discipline was implemented in stages to ensure a balance between deficit reduction and expansionary fiscal policy to support economic growth and national development. “We have successfully reduced the country’s fiscal deficit from 6.4% in 2021 to 4.1% in 2024, with a target of 3.8% in 2025, before it is expected to decrease further to 3.5% in 2026 as outlined in Budget 2026. “This reduction was achieved, among other things, through the broadening of the tax base including improvements to the Sales