(AFP) Malaysia is not heading into a recession despite expectations of lower economic growth, Prime Minister Dr Mahathir Mohamad said today.

Mahathir, who is also acting finance minister, also dismissed any plans to lower interest rates to boost the economy.

"We are not going into recession. Unless you have two consecutive quarters of negative growth, only then you can talk about recession," Mahathir told reporters after opening an economic forum.

The country posted a 3.2 percent year-on-year gross domestic product (GDP) growth in the three months to March and is likely to see growth in the second quarter ending June, he said.

The economy grew 6.3 percent year-on-year for October-December.

Asked about a quarter-on-quarter decline in GDP growth, Mahathir said: "This is not the way to calculate things... it's compared to (the same period) last year."

The premier said it was not necessary to change interest rates as there were other factors affecting the economy.

"We have been able to identify the areas which were not doing well and to devise some corrective measures to stimulate them. We don't think we can respond to a downturn purely by reducing interest rates."

The government in March revised downwards its GDP growth forecast this year to between five and six percent, from seven percent previously.

The economy grew 8.5 percent last year.