The world economy is on a course of best performance in three decades, but growth is expected to slow down next year due to high oil prices and macroeconomic regulation by the world's major economies.

The world's economic scenario this year is characterized by widespread and rapid growth. The International Monetary Fund (IMF) forecast in its September issue of the World Economic Outlook that the global economy would grow by 5 percent this year, a considerable pickup from 2003 when it expanded by 3.9 percent.

If the IMF forecast proves accurate, this year would mark the strongest growth since 1973, an IMF spokesman said in September.

The US economy is expected to grow by 4.3 percent, the euro-zone 2.2 percent and Japan 4.4 percent.

Developing countries are likely to enjoy a higher growth rate of 6.6 percent. Among them, Asia's developing economies will expand 7.6 percent, Latin America's by 4.6 percent and Africa's by 4.5 percent.

Adding to the good news is that growth is more evenly shared than before. The Economist weekly reported last month that for the first time since 1980, all the 55 major economies being tracked by the magazine are growing.

The rapid growth of the global economy this year comes as a continuation of good performance in the latter half of last year. Strong incentives to growth, such as the low interest rates of major economies, US tax cuts, the stock market bounce and increased corporate profits, did not recede in the first quarter of this year.

As a result, the US and Japanese economies grew by 4.5 percent and 6.3 percent respectively in the first three months. The euro-zone economy expanded by 0.7 percent over the previous quarter. China's economy grew by 9.8 percent year on year.

However, the surge of oil prices starting early in the year has had curbed global economic growth. US economic growth slowed down to 3.3 percent in the second quarter and slightly climbed to 3.9 percent in the third quarter. Japan's economy experienced a drastic slowdown, tumbling to growth rates of 1.5 percent and 0.3 percent in the second and third quarters respectively. Growth in the euro-zone was reduced to 0.5 percent and 0.3 percent in the same periods.

In November, the Japanese government revised down its economic forecasts for the first time in 17 months. The European Union, which had expected a growth rate of 0.2 percent for the last quarter of the year and 0.6 percent in the first quarter of next year, cut its growth estimates by 0.1 percentage point.

If that trend persists, Western economies' growth will be largely propelled by a single engine, the US economy. Given that prospect, economists have cut their growth projections for 2005. IMF Managing Director Rodrigo Rato said last month that a September prognosis putting growth at 4.3 percent appeared to be too high.

"The data now show a certain weakness in some sectors of the world, which leads us to believe that the growth will be slightly below our initial projections," said Rato, who believed next year's growth will be "around or above 4 percent."

Most economists believe the US economy's responsiveness to policy adjustments has been reduced, and it has entered an era of "spontaneous growth." Because of that change, the US Federal Reserve has raised interest rates four times since June to the current 2 percent, up by a total of one percentage point. The move was seen as a measure to stem inflation due to high oil prices and also provide room for further rate cuts to spur growth should the circumstances require.

The Japanese Cabinet Office believed Japan's economy is continuing to recover despite some recent signs of weakness.

In addition, the Chinese government's macroeconomic regulation measures will have positive effects on the growth of the global economy.

High oil prices will be the biggest negative factor in arresting global economic growth. Oil prices skyrocketed from 27 US dollars last September to 46.7 dollars in October, chipping away 0.5 percentage point of the global growth rate, according to the World Bank.

The World Bank predicted average oil prices will fall to 36 dollars in 2005 from this year's average of 39 dollars. Reduced demand, which resulted from a global growth slowdown, and increased output, are expected to push down oil prices gradually, but not drastically. In addition, fluctuations on the international oil market could also occur.

On the other hand, mammoth US fiscal and current account deficits could pull the dollar further down, posing another threat to the global economy. Most economists believe the huge deficit in the US current account will result in slower economic growth in the United States even if the US government begins to reduce the deficit, given the situation that other economies are also facing difficulties. To avert global economic slowdown, the euro-zone and Japan have greater responsibilities to stimulate their economies.

Other factors that might stand in the way of global growth include possible major terrorist attacks, interest rate hikes in developed countries and rising trade protectionism.