Global economic growth is expected to experience a growth rate of 3.25 percent in 2005 following an increase of 4 percent in 2004, a UN report said Tuesday.

The report, named "World Economic Situation and Prospects 2005", said the world economy has considerable momentum entering 2005 and most determinants of the short-term prospects remain positive.

According to the report, the high aggregate rate of growth in 2004 in part reflected the fact that the improvement was almost universal: every region except South Asia and the Commonwealth of Independent States grew more rapidly in 2004 than in 2003. In these two exceptional cases, growth slipped from its previous high levels but remained above 6 percent and 7 percent respectively.

Growth in the developing countries was the fastest for more than two decades, and among the developed countries, performance was more varied, it said, adding that growth was strong in North America, moderate in Japan but weak in Europe.

Meanwhile, the report pointed out that the higher oil price has already slowed global growth somewhat and policy measures intended to avert overheating will reduce it further.

However, despite the downward pressures, underlying global economic conditions remain sound and global growth is expected to moderate, it said.

The United States and China continues to be the principle engines for the global economy at present. GDP in the United States is estimated to have grown by at least 4 percent in 2004 and is expected to grow by 3 percent in 2005.

Growth in China reached 9.2 percent in 2004, and is forecast to fall to 8.75 percent in 2005 as China has taken actions to bring the economic expansion to a more sustainable rate.

Growth in Western Europe decelerated in the second half of 2004, partially as a result of higher oil prices. Growth for the year as a whole was 2 percent and little improvement is expected in 2005.

The report also said the economic recovery in Japan appears to be losing momentum, saying prospects for 2005 depend heavily on growth in China and the United States, oil prices and the global information and communication technologies cycle, with a further appreciation of the yen posing a downside risk.

East Asia continued to be the most rapidly growing developing region in 2004, largely driven by China's growth and the consequent expansion of intraregional trade. However, growth in this region seems to slip to 6.5 percent in 2005 due to slower growth worldwide, the deceleration in China and higher oil prices.

The report also stressed that one of the universal weaknesses in the world economy continues to be the slow growth of employment and the persistence of high rates of unemployment and underemployment in most developing countries.