Malaysia says no need for extra economic stimulus plan

PUTRAJAYA, Malaysia, May 29 (Reuters) - Malaysia does not need a stimulus plan to bolster its economy, a government minister said on Thursday, downplaying concerns about slowing global demand and record high commodity prices.

Strong domestic consumption and robust exports to Asian neighbours have held up Malaysia's economy but some analysts warn that growth could slow as global demand slackens.

The central bank said on Wednesday the economy grew at a faster-than-expected annual rate of 7.1 percent in the first quarter, lifted both by domestic demand and exports.

On Thursday, Second Finance Minister Nor Mohamed Yakcop said the Southeast Asian economy was on a sound footing.

"I am very positive that we can achieve the 5-6 percent growth based on the policies that we have," he told reporters in the Malaysian administrative capital.

"We don't need a special plan because we are not in a period of economic weakness."

The government has forecast economic growth of 5-6 percent in 2008. Economists polled by Reuters this month saw growth slowing to 5.7 percent this year from a three-year high of 6.3 percent in 2007.

Nor Mohamed also said the government was expected to unveil a fuel subsidy reform plan before the federal budget is announced in August.

Malaysia is working on a plan to restructure energy subsidies to ensure they target the poor.

The government subsidises fuel prices at the pump, making them among Asia's lowest. But the subsidy bill has ballooned due to soaring oil prices, placing a heavy strain on government finances.