KUALA LUMPUR: Approved investments in Malaysia rose by 3.7% in the first quarter from a year earlier to RM89.8bil (US$21.2bil ), the Malaysian Investment Development Authority said on Wednesday.

Foreign investments were RM60.4bil, or two-thirds of the total, and domestic investments accounted for RM29.4bil, the authority said in a statement.

"The investment environment in 2025 is expected to remain challenging due to continued geopolitical and macroeconomic headwinds stemming from the U.S.-China trade war," Trade Minister Tengku Datuk Seri Zafrul Abdul Aziz said in the statement.

Tengku Zafrul said that while protectionist policies and supply-chain frictions would affect corporate decision-making, he expected Malaysia to attract more investment, given that the broader Asian economy was increasing its share of global GDP.

The top three sources of foreign investment in the quarter were Singapore with RM28.3bil, the United States at RM9.9bil and China at RM7.9bil.

The services sector attracted RM57.8bil on the approved investments, the authority said. - Reuters