28/05/2012 (Bernama) - The government is optimistic the economy will grow by five per cent or more supported by strong domestic consumption despite the slowdown in the export sector, says Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah.

He said the optimism was based on the 4.7 per cent growth recorded in the first quarter of the year.

"The growth was beyond the target set by Bank Negara Malaysia and it is a reasonable achievement, he told reporters after opening the Bandar Spring 'Kedai Rakyat' in Kampung Tengku Hussein near here today.

Central Bank Governor Tan Sri Dr Zeti Akhtar Aziz said the better-than expected first quarter growth was achieved on the back of a 20.8 per cent drop in net exports when compared with a year ago.

She said the first quarter performance had placed the country on a strong footing to achieve the Gross Domestic Product growth target of between four and five per cent set by the government for the year.

Explaining further, Ahmad Husni said besides private consumption and investment, the country was still depending on the export of commodities such as palm oil, crude petroleum and natural rubber.

"Exports to Singapore, Japan and China account for 38 per cent of the country's offtake while the European Union (EU) accounted for 9.5 per cent.

"And, 74 per cent of our exports to the EU goes to Germany, France, Netherlands and the United Kingdom," he said.

Ahmad Husni also said crisis-hit Greece, Spain, Italy, Portugal and Ireland contribute 0.7 per cent or RM1.2 billion of Malaysia's total exports.

"Although Malaysia is reeling from the effect of the crisis on other Asian countries, yet domestic initiatives will be stepped up via government expenditure as outlined in the 2012 Budget," he added.

Compared with Malaysia, the United States of America recorded a first quarter growth of 2.1 per cent, Japan 2.7 per cent cent, Hong Kong 0.4 per cent, Taiwan 0.4 per cent, Singapore 1.6 per cent, China 8.1 per cent and Thailand 0.3 per cent, he added.