Johor-S’pore SEZ helps southern state beat economic growth of Singapore, Malaysia: DBS
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Johor's economy grew 6.4 per cent in 2024, compared with 5.1 per cent for Malaysia and 4.4 per cent for Singapore.
PHOTO: BT FILE
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SINGAPORE - The Johor-Singapore Special Economic Zone (JS-SEZ) is showing great potential, based on a DBS Bank report released on Sept 4.
The Johor state’s economy grew faster than those of Singapore and Malaysia in 2024 as a result of the JS-SEZ.
Johor saw a 6.4 per cent growth in gross domestic product (GDP) in 2024, compared with 5.1 per cent for Malaysia and 4.4 per cent for Singapore. The gap between the state’s growth and national growth was the largest since 2016.
While the SEZ agreement was signed in January 2025, Singapore and Malaysia inked a memorandum of understanding a year ago.
The zone aims to drive investments in key sectors, namely manufacturing, logistics, food security, tourism, energy, the digital economy, green economy, financial services, business services, education and health.
DBS economist Chua Han Teng said Johor will be a “key contributor” to the 13th Malaysia Plan, which targets a national growth average of 4.5 per cent to 5.5 per cent.
Malaysia is also targeting 6 per cent growth in private investment from 2026 to 2030 “as it aims for high-income status”, compared with a 3.6 per cent growth in public investment.
Foreigners have continued to invest in Malaysia, exceeding 50 per cent of total investment on average across the past three years. Singapore has been the top source of such investments, comprising 40 per cent of all foreign investments in the first half of 2025.
Johor in particular has emerged as a data centre “hot spot”, added Mr Chua. Singapore-based Princeton Digital, backed by Warburg Pincus, launched a US$1.5 billion (S$1.9 billion) Johor data centre in 2024, following other companies including Nvidia and Microsoft.
Mr Chua cited the JS-SEZ as a catalyst for such investments, pointing out how Johor state accounted for 30 per cent of all investments in Malaysia in the first half of 2025. Foreign investment accounted for about 61 per cent of all approved investment in the zone during that period.
Investments into the services sector in Johor continued to grow, driving an increasingly large portion of overall investments in the state.
As a result, Johor was ranked second among all Malaysian states in terms of construction activity at 18 per cent of national construction activity in the first half of 2025, said Mr Chua.
The data centre boom was a likely reason for Johor’s “strong expansion” in construction work done, with the non-residential segment a key force.
His report also stated that Malaysia’s non-residential construction work was driven primarily by Johor. That “underscores Johor’s importance in Malaysia’s ongoing development to high-income nation status”. THE BUSINESS TIMES
