United Nations ? The global economy expanded by 4 percent last year, with developing countries a particular success, the United Nations said Tuesday in an upbeat report about the world’s finances in 2004.

But economists warned that major imbalances pose a serious threat, singling out the U.S. trade deficit, which rose to more than $650 billion. That led the dollar to reach a new low against the euro in 2004.

A Chinese man stops his motorized bicycle near an advertisement on a street in Beijing. China's economy expanded at its fastest pace in eight years in 2004, growing at an annual rate of 9.5 percent over the year before to .65 trillion despite efforts to slow growth, the government said Tuesday.

“Some correction of the United States fiscal deficit and an improvement in its private savings rate seems indispensable,” the report said.

The economists said the expansion was part of a cyclical recovery that was reaching its peak. But they said that global conditions were fundamentally sound, and while growth is expected to slow to a little more than 3 percent next year, that would not indicate a reversal.

The economies of the United States and China continue to be the main engines for growth, with China especially providing new stimulus with increased demand for raw materials.

Among developed countries, Japan performed moderately well, while Europe lagged.