The US sub-prime crisis would have only a minimal impact on the Malaysian economy this year, central bank governor Zeti Aktar said.

"We do not see at this stage of it having an impact on the economy. Furthermore, in other parts of the world, like Europe, Japan and other parts of Asia, they are still doing well, so all this will mitigate the impact of a slower growth in the US on our economy," Zeti told reporters.

Confined

The central banker said the US sub-prime problem has so far been confined to financial markets, with little impact on the wider US economy.

She said government maintains its official gross domestic product forecast of 6.0 percent for 2007, on the back of sustained growth on sectors such as construction and mining among others.

"Our domestic demand is strong, public spending will also sustain the growth of the economy," Zeti said.