MY Morning Wrap | Maxis Considers Buying Out U Mobile to Expand in Malaysia

Malaysia is poised to become Asia's third-biggest data centre market after Japan and India, according to a press statement by global real estate property technology group Juwai IQI Holdings. The country's strategic location, favourable government policies, proximity to Singapore, and attractively priced land, power, and water were cited as contributing factors to the growth. The Malaysian Investment Development Authority and Malaysia Digital Economy Corporation have offered tax incentives, grants, and regulatory support to attract data centre investments. The country's developed telecommunications infrastructure also ensures high-speed internet connectivity and low latency, both essential for data centre operations. The data centre market development in the pipeline consists of 1.2 GW, representing 600% growth over the next five years, with investments from major cloud service providers.

The Asean+3 Macroeconomic Research Office (Amro) has cut Malaysia's economic expansion forecast to 4.7% for 2024, from the previous estimate of 5%, due to slower-than-expected export growth. However, the regional macroeconomic surveillance organisation raised its 2025 gross domestic product (GDP) growth forecast for Malaysia to 4.9%, on an expected strong rebound in exports. Amro's chief economist Khor Hoe Ee said that resilient domestic demand and foreign direct investments made in the past few years will help support the country's economy. The ringgit has been performing well since February, and Amro strongly supports the rationalisation of subsidies in Malaysia to free up fiscal space for growth-enhancing expenditures.