Investment, trade and industry minister Tengku Zafrul Aziz said the reduction in the country’s high-technology exports had influenced Malaysia’s lower position in the latest IMD ranking, and that it is expected to improve this year.

Tengku Zafrul said this is based on the many new investments from electrical and electronics companies in Malaysia as well as those from multinational corporations.

“All of these (investments) will begin to have an effect in the next 12 to 18 months, and they will improve our position,” he said in a post on social media today.

High-technology exports are products with extensive research and development components, such as those in the aerospace, computer, pharmaceutical, scientific instruments, chemical, and electrical machinery sectors.

Tengku Zafrul said Malaysia’s lower position in the IMD competitiveness ranking resulted from a fall in electronic communications exports due to lower global demand and increased global competition for electronic communications products last year.

“For example, China’s high-technology exports in the first 10 months of 2023 fell 11.4% year-on-year to US$728.2 billion, while South Korea’s (high-technology exports) plummeted 28% to US$110 billion, and Japan was 10% lower to US$76.9 billion,” he said.

However, he said the global sales of semiconductors are projected to increase 16% in 2024 and 12.5% in 2025, benefitting Malaysia as the world’s sixth-largest semiconductor exporter.

“When demand for semiconductors increases, a country’s high-technology exports will also increase,” he said.

Tengku Zafrul said stable economic growth, low unemployment and an inflation rate that remains under control will improve Malaysia’s position in the near future.