KUALA LUMPUR, Aug 12 (Bernama) -- Prime Minister Datuk Seri Najib Tun Razak is confident that Malaysia will be able to meet its Gross Domestic Product (GDP) growth target of between 5.5 and 6.0 per cent this year based on a domestic demand which has still remained high although the global economy could be affected by the downgrading of the United States' credit rating.

Najib, who is also Finance Minister, said that the 2012 Budget would take into account the external economic circumstances.

In order for Malaysia to meet its target, there would have to be serious efforts from all parties including the public sector where they would have to carry out whatever that had been promised in terms of investments, he said.

"We hope that the crises in the United States and Europe would be overcome so that the world economy does not fall or see a slow down as this would affect the Malaysian economy especially in the manufacturing sector."

Many investors in Malaysia have markets in the US and Europe, and if these markets are disturbed, it would affect the local economic growth, he said.

For the first quarter this year, Malaysia's GDP grew 4.6 per cent.

Standard & Poor Rating Services recently downgraded its long-term sovereign credit rating on the US to AA+ from AAA with a negative outlook.

The research firm said the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate had indicated that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues was less likely than it had been previously assumed.

-- BERNAMA