KUALA LUMPUR, March 25 (Xinhua) -- Turmoil in the Middle East is pushing up oil prices, transport costs and inflationary pressures, but Malaysia could benefit from shifting global capital flows if it positions itself as a stable investment destination, according to Malaysian Investment Development Authority (MIDA) Chairman Tengku Zafrul Aziz.

Heightened geopolitical tensions are disrupting demand and supply chains, raising the risk of "demand destruction" and clouding the global economic outlook, particularly for trade-dependent economies such as Malaysia, he said in a Facebook post on Tuesday.

He noted, however, that periods of global uncertainty often trigger a reordering of capital and supply chains, as investors seek safer and more predictable markets.

"This creates strategic opportunities for countries that are prepared. Malaysia must seize this opportunity," he said, adding that this will be underpinned by Malaysia's political stability, clear policies and established role in global trade networks.

According to him, Malaysia's investment momentum remains strong, with approved investments reaching a record 426.7 billion ringgit (about 108 billion U.S. dollars) in 2025, reinforcing investor confidence in its track record.

He opined that the country is also well placed to attract capital from Gulf sovereign wealth funds, which collectively manage trillions of dollars in assets and are expected to diversify amid rising risks.

Key sectors drawing interest include data centers, renewable energy, energy infrastructure, logistics and advanced manufacturing, areas seen as critical to long-term resilience.

Meanwhile, ongoing free trade agreement negotiations between Malaysia and the Gulf Cooperation Council are expected to further support investment flows, he said.

Still, he cautioned that prolonged conflict could drive up living costs and inflation, with Malaysians likely to feel the impact through higher fuel prices.

He stressed the need for efficient approvals, coordinated investor facilitation and continued economic reforms to ensure Malaysia remains competitive and that investment benefits are broadly shared. ■