The world's fourth-largest economy is likely to expand by 11.5 per cent this year, the fastest pace since 1994, according to a research report compiled by Wang Xiaoguang, a senior economist of the Macroeconomic Research Institute under the National Development and Reform Commission.

On the sidelines of the party congress last week, Zhu Zhixin, a vice-chairman of the National Development and Reform Commission, said that economic growth in the third quarter might be similar to that of the first half.

GDP grew 11.5 per cent in the first half.

The report said growth momentum would be sustained in the first half of next year due to frenzied investment in the run-up to the Olympics in August.

Growth would slow in the second half but for the full year it would be at least 11 per cent, the report said.

The politically sensitive consumer price index would likely rise 4.3 per cent this year, up from 4.1 per cent in the first nine months and well above the government's alarming line of 3 per cent, the report said.

However, it would slow to a 3.5 per cent increase next year, due to increased supplies of food, especially pork, the main source of this year's surge in inflation, the report said.

The consumer price index rose 6.5 per cent in August, the fastest gain in more than a decade.

The country's trade surplus growth would likely slow to 20 per cent next year to US$308.4 billion following the reduction in export tax rebates for processing-trade products, said the report.

The trade surplus could reach US$257 billion this year, up about 45 per cent from US$177.5 billion last year, the report said.

Inflation worries

The surge in food prices on the mainland is a politically sensitive issue

The increase in the consumer price index for this year is forecast at: 4.3%