KUALA LUMPUR: Malaysia’s accumulated fixed asset investment, or gross capital stock (GKS), grew 2.7% year-on-year (y-o-y) to RM5.17 trillion in 2020, the Statistics Department said.

       Simultaneously, the net capital stock (NKS), which represents the wealth of Malaysia’s economy, reached a value of RM3.22 trillion last year.

       Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the NKS climbed slowly at 1.8% compared with 3.6% in the previous year.

       He said from 2018 until now, the value of the national capital stock went up slowly due to the declining Gross Fixed Capital Formation (GFCF).

       “The slow growth momentum of capital stock can be seen more clearly in 2020, where there was a double-digit decline in GFCF at 14.5%. This is due to the investment of fixed assets for all economic activities that were affected by the movement control order which was implemented over the past year following the Covid-19 pandemic,” he said in a statement yesterday.

       Mohd Uzir said the magnitude of this decline was the worst on record since the 1998 Asian Financial Crisis.

       The impact of declining capital stock could also be seen in the world’s major economies, including the United States, Japan and the United Kingdom, he said.

       He said based on economic activity, capital stock for the services sector grew slowly at 2.5% in 2020 compared with 4.2% in the previous year, driven by the subsectors transport and storage, and information and communication which climbed slowly at 0.4% while the finance, insurance, real estate and business services rose 5.8%. — Bernama

       Capital stock for the manufacturing sector increased marginally by 0.4% compared with 3.5% in 2019, influenced by petroleum, chemicals, rubber and plastics products and electrical, electronic and optical products which edged up slowly at 0.8% and 0.6%, respectively, he said.

       The non-metallic mineral products, basic metal and fabricated metal products slipped 0.8% while textiles and wood product decreased 2.6%.

       As for the mining and quarrying sector, Mohd Uzir said the capital stock declined to 0.02% in 2020 while the construction sector expanded 4.3% and the agriculture sector gained 1.6%.

       “Looking at the type of assets, structure remained as the main contributor to the capital stock with a contribution of 80.2%, equivalent to RM2.58 trillion, supported by other structure and non-residential.

       “The greater asset value of the structure, as well as the longer lifespan compared to other assets, are major factors in the dominance of the structure in the overall value of fixed assets in Malaysia.

       “This was followed by machinery and equipment with a contribution of 11.4% worth RM368.86bil, as well as other assets with a contribution of 8.4%, and recorded RM270.25bil,” he said.

       Mohd Uzir said the country’s asset composition is similar to the asset composition of other countries, including South Korea and Singapore.

       Overall, he said the capital stocks performance in the last three years has deteriorated, coupled with the the pandemic which has affected overall economic activity.

       “The country’s ability to continue to expand in the future will be disrupted if this slowdown in investment growth prolongs as it will have a detrimental effect on the production capacity.

       “Investment in fixed assets, especially automation-oriented assets, needs to be increased in line with the industrial revolution 4.0 (4IR) for the country’s transition to a high-income economy,” he said, adding efforts towards reforming the investment ecosystem must be taken to ensure sustainable economic growth. - Bernama