He warned that attracting new investors would be challenging in the current climate, noting that while existing investors in Malaysia remained committed, newcomers were showing hesitation.

“Those who have committed have not pulled out. But the ones that have not committed are now thinking (whether to invest or not),” he told reporters during the regional launch of the Asean Economic Community Strategic Plan 2026–2030.

He also said it was becoming increasingly difficult to make projections on investments.

“When we have discussions with companies, we understand their concerns. Many (investors) are adopting a wait-and-see approach due to the dynamic geopolitical situation, especially between the US and China.

“New companies looking to invest want to assess the global situation first,” Tengku Zafrul added.

When asked about Malaysia’s RM89 billion in approved investments in the first quarter of the year – up 3.7% from the same period last year – Tengku Zafrul said it was “pleasantly surprising” given typical first-quarter sluggishness.

“In terms of foreign investment, it is almost 70% of the investment. And at the same time, we see that the biggest sector is services, especially the digital economy,” he added.

Tengku Zafrul is expected to travel to Washington on June 18 to continue negotiations over the US tariffs imposed on Malaysian goods.

He said the Malaysian government hopes to persuade Washington to reduce import duties for certain sectors to below 10%.

“We also want to ensure that our local companies exporting to the US – especially in sectors such as furniture and downstream palm oil – are taken into account,” Tengku Zafrul said, adding that these sectors “are not really in competition” with American industries.