Socio-Economic Research Centre (SERC) executive director Lee Heng Guie said the 13MP’s total investment of RM611 billion will be a major catalyst to drive Malaysia’s economic growth in the coming years.
In addition, this huge allocation will support the structural economic transition into high-growth, high-value and strategic sectors.
The funding comprises RM430 billion from the federal government, RM120 billion from government-linked companies (GLCs) and government-linked investment companies (GLICs), and RM61 billion through public-private partnerships (PPP).
He said the RM611 billion to be invested in a multitude of projects will have a multiplier effect that will be highly positive for the economy, business and industry, and ultimately the people.
Lee estimates a multiplier ratio of between two and 2.5 times that would translate to between RM1.22 trillion and RM1.52 trillion worth of economic activity.
The resulting benefits of such investment are not merely monetary but also in terms of jobs created, development of supporting industries along the supply chain, and so on, he said in an interview with FMT.
A trillion-ringgit market
Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid concurred the 13MP will have a multiplier effect that could potentially unleash a RM1 trillion market for business over the plan’s duration (2026-2030).
“Every (ringgit of) government spending will be multiplied as it has spillover effects on the economy,” he told FMT.
“For instance, the completion of the East Coast Rail Link (ECRL) in 2027 will certainly have a multiplier effect especially for areas along the rail line and its stations. Not to mention the land bridge that will connect Kuantan Port and Port Klang will also have a positive effect on the local economy,” he added.
The 13MP’s focus on quality strategic investment is justified because the resulting benefits are multifaceted, extending beyond direct monetary gains.
This approach generates substantial socioeconomic spillovers, particularly creating higher-quality jobs and fostering stronger, more reliable local businesses to integrate into the supply chain.
Afzanizam expects investment activities to be sustained under 13MP, facilitating the government’s aspiration towards “economic complexity and value creation” which ultimately drives the economy towards achieving high-income status.
“For instance, the energy transition such as solar, waste-to-energy as well as a move towards electric vehicles and digitalisation would require sizeable investment. Hence, the commitment from the federal government, GLCs/GLICs and private sector is highly critical to realise such aspiration,” he said.
Moving up the value chain
In a departure from previous five-year plans with more traditional development goals, the government has placed artificial intelligence (AI), digitalisation, and high-value industries front and centre of the 13MP.
Malaysia’s economic growth will henceforth be driven by a transition to a value-creation economy, led by digital technology, AI and other high-growth, high-value industries such as semiconductors and renewable energy (RE).
“Malaysia has outlined a clear direction to lead the Southeast Asian economy in the fields of AI, digital technology and the RE industry,” Prime Minister Anwar Ibrahim told parliament.
Under the 13MP, the government aims for AI adoption to be integrated across key sectors including manufacturing, agriculture, healthcare, education, finance, security, housing, and public services. The 13MP is targeting to have 95% of all federal government services delivered online by 2030.
The administration also plans to introduce MyDigital ID, a secure digital identity, to facilitate access to these online services. GovTech initiatives will focus on upgrading the judicial system and improving public service delivery through data analytics and adopting digital technology.
These initiatives are expected to drive productivity, efficiency, and innovation while strengthening the country’s global competitiveness.
Ambitious target for E&E sector
Through the High Value-High Technology Semiconductor Industry Flagship Project, the 13MP targets electrical and electronics (E&E) exports reaching nearly RM1 trillion by 2030 from about RM600 billion last year.
Whether this target is achievable remains to be seen given the risk of the US imposing punitive tariffs on semiconductor chips made in countries without US-based manufacturing.
Nevertheless, MBSB Research (formerly MIDF Research) is positive on the government’s effort to reinvigorate Malaysia’s semiconductor sector, which will bring about “a positive multiplier effect”.
It said based on the partnership with ARM Holdings, announced earlier this year, the focus is more on developing the front end of the semiconductor value chain, especially in the field of integrated circuit (IC) design.
Malaysia has committed US$225 million (RM930.52 million) in a four-year partnership with UK-based ARM, a semiconductor and software design company, enabling the country to lower the barrier for Malaysian companies to gain access to its intellectual property and technology.
The collaboration supports the National Semiconductor Strategy goal of creating 10 companies with annual revenues ranging from RM1 billion to RM4.7 billion. The deal also includes developing “Made by Malaysia” AI chips by leveraging ARM’s technology.
“Note that currently Malaysia’s involvement in the semiconductor ecosystem is more on the back end of the semiconductor value chain, whereby 13% of the global chip assembly, testing and packaging is done in the country,” said its technology analyst Martin Foo.
He added local IC design companies such as Oppstar, Skyechip, IC Microsystems and Symmid would be beneficiaries of this focus.
Forging a low-carbon future
The 13MP reinforces Malaysia’s sustainable development and low-carbon ambitions by aligning with existing national roadmaps such as the National Energy Transition Roadmap (NETR) , and sets a target to increase renewable energy (RE) installed capacity mix from 29% in 2024 to 35% by 2030.
Cypark Resources Bhd chief investment officer Belqaizi Taufik said the 35% target for RE is “ambitious but it’s achievable if we get the fundamentals right”.
“First, we need consistent and timely rollout of RE programmes. Long-term investors need policy clarity and predictability. Second, access to financing remains a real challenge for many local players, especially mid-sized ones.
“Grid modernisation is another critical enabler. Without upgrades and better planning for decentralised generation, we’ll hit technical bottlenecks,” he told FMT.
There is also crucial need to grow a skilled RE workforce to meet rising demand. “If we get these things right, I’m confident we can deliver the more than 10GW of new RE capacity needed by 2030,” he added.
Belqaizi said local RE companies, including Cypark, are geared up for opportunities arising from the government’s plan to fast track RE capacity.
“The Malaysian RE ecosystem has come a long way. At Cypark, for example, we’ve delivered over 400MW of installed capacity across solar, waste-to-energy, and biogas.
“With continued policy support and efficient execution on the government’s side, local players like Cypark are well-positioned to take the lead,” he added.
Meanwhile, the Federation of Malaysian Manufacturing (FMM) said the 13MP is “a fiscally responsible blueprint” that rightly positions high-multiplier sectors, particularly manufacturing, as the primary drivers of growth, employment and structural upgrading.
“Its strong emphasis on digitalisation, AI, and new energy sources sets a forward-looking tone for Malaysia’s industrial transformation,” said its president Soh Thian Lai.
While the plan lays a credible foundation for the future, delivering on it will require “policy coherence, private sector engagement and sustained institutional focus”, he stressed.