'If we achieve a growth of 5.5 per cent this year, it is very, very good,' Prime Minister Abdullah Ahmad Badawi was quoted as saying by state Bernama news agency.

Mr Abdullah last month said the growth target for this year had been trimmed to 5.0 per cent and 3.5 per cent for 2009 on softening export demand and slower foreign direct investment inflows.

The economy expanded at 4.7 per cent in the third quarter on a deteriorating global economic and financial crisis, the central bank, Bank Negara, announced on Friday.

The regulating bank had revised upwards second quarter growth to 6.7 per cent from 6.3 per cent while announcing a 7.1 per cent growth in the economy for the first three months of the year.

Mr Abdullah said the public sector should speed up the implementation of projects under a seven-billion-ringgit (S$3.05 billion) economic stimulus package to spur the local economy and increase domestic demand.

'We want domestic consumption to increase and the country's economic growth to also accelerate,' he said.

The spending package, reaped from savings on reduced oil subsidies, is to be spent on 'high-impact' construction projects including roads, schools and low-cost housing.

Bank Negara governor Zeti Akhtar Aziz had said that Malaysia will likely escape a recession next year and post modest growth despite the global financial crisis due to strong consumer demand and public spending.

Malaysia's top trading partner, neighbouring Singapore, and Asia's largest economy, Japan, are already in a recession. -- AFP