The world economy had maintained robust growth with average growth rate of 4 percent last year, which is 1.2 percent higher than 2003. But the growth rate is expected to decrease to 3.25 percent in 2005. The Chinese mainland will continue to be the locomotive of the world economy, forecasts a UN report entitled "World Economic Situation and Prospects 2005" released Tuesday.

The report says the recovery of the economy is the principal cause for the world economy's most robust growth since 2000. The report stresses that the growth rate slightly higher than 3 percent in 2005 does not indicate the economy is going downward. The average growth rate of 6.2 percent for developing countries in 2004 is the fastest rate in recent 20 years.

The Western Europe has replaced Japan to be major momentum for global economy, while the US is still the developed country with the best performance. The United States and China had served as principal locomotive for the global economy in 2004. The United States' import had stimulated the manufacture industry around the world, while China's demand had given rise to price of raw materials, which benefited the export industry of Africa and Latin America

The economic performance of HK will largely depend on the economic growth of the Chinese mainland in 2005. The individual consumption, investment on fixed assets and the CEPA had given momentum to the HK economic growth last year. But the Chinese economy is predicted to slow down in 2005, which will hinder growth of HK economy.

The report says the Chinese mainland will play a vital role in the global and East Asian economy in 2005. The economic growth rate in the Chinese mainland is to drop to 8.75 percent due to macro control measures. The report predicts the Chinese mainland will further curb overheated economy through rise of interest rate. However whether the interest rate rise will affect economic activities effectively depends on the government's efforts to further the financial mechanism dominated by free market.

By People's Daily Online