Malaysia said Friday it was still on track to achieve its growth target of six percent for 2006 despite steep hikes in electricity tariffs to be introduced next month.

"It will not be (so) substantial as to affect the confidence and growth of the country," Second Finance Minister Nor Mohamed Yakcop was quoted as saying by Bernama.

"We are on target to achieve six percent gross domestic product growth," he said, adding there would be no significant impact on inflation.

Malaysia on Wednesday announced its first electricity price hike in nearly a decade, with tariffs to be raised by 12 percent on average from June 1 in what it said was a reaction to rising fuel prices.

Soaring oil costs saw inflation hit a six-year high of 4.8 percent in March and analysts have said the electricity price move is expected to add to the inflationary pressure.

The energy hike has also been slammed by the parliamentary opposition which has said it will worsen the already high inflation rate.

The Federation of Malaysian Manufacturers said today it was "most disappointed" with the tariff hikes which will hit energy-intensive industries and affect the competitiveness of Malaysia's exports.

Hit doubly hard

Exporters "are already facing lower proceeds from the strengthening of the ringgit. Exporters would now also have to absorb the full impact of the energy cost increase because they lack clout to re-negotiate or raise prices," it said.

"Exporters are now hit doubly hard in their price competitiveness with rapidly rising costs."

The federation also said the rise would put Malaysia's average electricity selling price amongst the region's highest and put off investors.

Nor Mohamed, defending the tariff hikes, said its impact on the business sector was "reasonable and not too high", and that companies could absorb some of the costs.

"In this particular decision, every sector has been considered and discussed. Views were taken (into consideration) ... over a long period of time," he said.