'This year's global jobs picture is one of contrasts and uncertainty,' said ILO director-general Juan Somavia in a statement on Wednesday.

'While global growth is annually producing millions of new jobs, unemployment remains unacceptably high and may go to levels not seen before this year,' he added.

The gloomy outlook is in contrast to the previous year, hailed by the ILO as a 'watershed' with 45 million new jobs created and only a slight rise in unemployment, which stood at 189.9 million people at the end of last year.

The ILO said in its Global Employment Trends report for 2008 that the worldwide jobless rate is set to increase to 6.1 per cent from 6 per cent the previous year.

Economist Dorothea Schmidt told journalists that five million fewer jobs are expected to be created in the year ahead.

But the organisation's employment director, Mr Jose Salazar-Xirinachs, conceded that these forecasts will have to be further revised after recent market turmoil wiped billions of dollars off stock exchanges, further stoking fears of a global recession.

The ILO noted that, to date, the slowdown in industrialised countries due to the credit crunch and soaring oil prices has been offset by strong growth in developing economies, especially in Asia.

'Probably, for the first time ever, it can be seen that turbulence in one region (developed countries and the European Union, and upfront the United States) may not necessarily impact on other regions to the extent that a global slowdown is caused,' the report said.

Jobs growth in the developed countries rose 2.5 per cent last year, less than the year before, partly as a result of turbulence stemming from a US housing market crisis, the ILO said. 'The outlook for the coming years is not as positive,' the report concluded.

In contrast, South Asia, dominated by India, was the world leader in employment growth last year, contributing 28 per cent of the jobs created worldwide. But it also had the highest share of 'vulnerable employment' as a result of poor-quality jobs created, and few women in the region are employed.

East Asia, with China as the driver, accounted for 16 per cent of the jobs created worldwide last year.

The Middle East and North Africa continued to have the highest unemployment rates at 11.8 per cent and 10.9 per cent, respectively.

The ILO urged governments to place labour market policies at the heart of macroeconomic strategy to ensure that growth translates into new jobs.

'The current economic situation is, therefore, cause for significant concern, and the ILO will monitor developments closely over the coming year,' Mr Somavia said.

AFP, REUTERS