STATEMENT ON THE OUTCOME OF EUROPEAN REFERENDUM

1. While there may be some impact in the very near term, the medium to long term impact of Brexit on Malaysia’s trade and investment will be minimal. With our strong fundamentals and economic diversification, we are in better position to face any uncertainty.

2. The UK economy has been growing faster than most European Union economies. In 2015, UK GDP grew by 2.3% as compared to 1.9% for the EU. We believe with the appropriate policies in place, the UK economy will adjust to the new reality.

3. As far as trade is concerned, Brexit is unlikely to have significant disruption effect on Malaysia’s external sector. In 2015, Malaysia’s trade with the United Kingdom stood at RM16.5 billion or 1.1% of our total trade.

4. Our total trade with the UK registered a 9.4% growth in Ringgit terms to RM16.45 in 2015 billion from RM15.02 billion in 2014. Total exports amounted to RM9.32 billion, an increase of 17.6%, compared to RM7.92 billion in 2014. Total imports increased slightly by 0.3% to RM7.13 billion in 2015 compared to RM7.10 billion in 2014.

5. In 2015, the UK was Malaysia’s 3rd largest trading partner in the European Union (EU) and our 4th largest source of investment.  As at 2015, Malaysia has implemented 433 manufacturing projects with the UK participation valued at RM6.8 billion in term of investment.

6. Brexit will have minimal impact on Foreign Direct Investment (FDI), as they are normally long-term in nature and exchange rate volatility is usually priced into the FDI-related contracts. We believe that the UK will continue to be key player through its investments in Malaysia’s services sector especially in banking and education, amongst others.

7. The UK may no longer be part of the currently negotiated Malaysia-EU FTA but we will explore the possibility of having a separate bilateral FTA with the country. This is part of our efforts to open up further business opportunities with the UK.

8. The decades of close cooperation between Malaysia and the UK transcend beyond economic partnership. They form a strong foundation for our future growth and Brexit will not affect our close ties. We will continue to build upon this momentum and forge ahead.

Dato’ Sri Mustapa Mohamed
Minister of International Trade and Industry, Malaysia