Fdi Inflow, Current Account Balance, Inflation and...

Masters of Science (Banking) UUM-IBBM WBB 6013: SEMINAR IN BANKING FDI Inflow, Current Account Balance, Inflation And Interest Rate: How Do They Impact The Malaysian Economy? By Siva Kumar Kandiah (Matric No: 89306) ___________________________________________________________ Abstract This article seeks to find which of the macroeconomic variables among FDI inflow, current account balance, inflation and interest rate play a significant role in economic growth in Malaysia using the SPSS Regression method for a time period of 14 years from 1995 to 2008 (Oct). The results of the research indicated that FDI and inflation are not significantly related to economic growth in Malaysia during the period of study. However, CA†¦show more content†¦In fact, FDI is said to be the most important contributing factor for Malaysia’s economic performance. The early beginnings of luring foreign investors to Malaysian soil started with the introduction of the Investment Incentives Act 1968, and followed by the establishment of the Free Trade Zones (FTZs) during the Second Malaysia Plan (1971-75). Since then, Malaysia has attracted a large portion of the investment dollar that flowed into Asia. In 1995, for example, Malaysia was the second largest FDI recipient among A sian economies at US$ 5.8 billion. Malaysia recorded inward FDI of USD 7.3 billion and USD 6.3 billion in 1996 and 1997 respectively. The lower figures in 1997 may be attributed to the lack of confidence as a result of the Asian financial crisis but by 1998, figures indicate that investor confidence had improved. Malaysia’s highest FDI inflow was recorded in 2007 when the amount surged to USD 8.4 billion from USD 6.0 billion in 2006. FDIs are private-sector investments that are made by a company into a foreign country. Foreign direct investments create a strong demand for a local currency and help boost the economy. With money coming into a country, strong foreign direct investment is one way governments can finance current account deficits. However, just as funds flow in, they also can flow out,Show MoreRelatedKazi and Kazi Tea6440 Words   |  26 Pagescountry. As of 2010, the total population of Malaysia is 28.3 million with an annual population growth rate of 1.7%. Malays are the prominent group comprising of 53.3% of total population. Others include 26.0%, indigenous 11.8%, Indian 7.7%, and others 1.2%. Most of Malaysians are Muslims consisting of 60.40% and then Buddhism 19.2% following Christianity and others. Malaysia has a literacy rate of 93.5%. Language Bahasa Melayu is the official language of Malaysia. However English is widely usedRead MoreThe Impact of Exchange Rate Fluctuation on Macroeconomic Performance in Nigeria22514 Words   |  91 PagesTHE IMPACT OF EXCHANGE RATE FLUCTUATION ON MACROECONOMIC PERFORMANCE IN NIGERIA CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF THE STUDY This study is designed to examine the causes of exchange rate fluctuations and their impact on the Nigerian economy since there is scarcely any country that lives in absolute autarky in this globalised world. The economies of all the countries of the world are linked directly or indirectly through asset or/and goods markets. This linkage is made possible throughRead MoreDubais Political and Economic Development: Essay38738 Words   |  155 Pagesmanaged to shift the citys economic focus from fishing and gold trading to tourism, mass communications, shipping, and finance. Unlike many of its regional peers which have developed unstable regimes and stagnant, oil-dependent economies, Dubai has diversified its economy to become a politically stable center for commerce and tourism. Consequently, Dubai has resisted the expectations of regional analysts and is a clear outlier from development trends in the Gulf. This observation leads to the central