2. Throughout last year, the forces propelling Hong Kong's economic recovery strengthened considerably. Despite negative factors such as oil price hikes, we achieved a growth rate of 7.5%. We can say that our economy is now at its best since the Asian financial crisis.

3. It is noteworthy that the major driving force of our economic recovery has come from both strong external demand and strengthening local demand. As the Mainland and other major world economies have simultaneously achieved fast growth seldom seen in recent years, demand for our products and services has increased drastically. As a result, many of our economic indicators last year registered double-digit growth. Exports of goods grew 15% in real terms during the first 11 months; exports of services increased by nearly 17% in the first three quarters and visitor arrivals exceeded 21 million, a surge of nearly 40% compared to 2003. There was a 7.4% hike in private consumption expenditure during the first three quarters, the highest rise in the past decade. Investment in machinery and equipment rose by 18% in real terms in the first three quarters. The number of overseas and Mainland enterprises setting up business in Hong Kong increased continuously, registering an increase of 12.5% over 2003. The total of 3 609 firms marked a historical high.

4. We can see that following the attack of SARS in 2003, the community has quickly regained its confidence. Local consumption and investment activities have been picking up, reversing the sluggish domestic demand that persisted over the past few years. This has made the current economic recovery more broad based and sustainable, its foundation more solid.