The reported decline was largely due to the return of 1.1 million refugees after the end of long-running crises mainly in Africa and Afghanistan, according to the 2003 global overview of trends released by the UN High Commissioner for Refugees (UNHCR) on Thursday.
The tally included 9.7 million people who had sought refuge abroad - officially defined as refugees - and 995,000 asylum seekers, as well as another 4.2 million people who had fled their homes but remained inside their home country's borders.
Nearly 650,000 refugees returned to their homes in Afghanistan. Afghans remained the largest single group of refugees, with 2.1 million nationals spread across 74 countries following repeated wars and invasions since the late 1970s.
But the UNHCR revealed that a recent registration in Iran had uncovered 600,000 more Afghan refugees there who were not included in the 2003 data, and another 1.6 million living in Pakistani communities were also not counted.
UNHCR officials said recently that the number of Afghan asylum seekers in industrialised countries was declining sharply as many Afghans took advantage of relative stability in the country and favourable conditions for repatriation.
The only refugee population to increase significantly were the Sudanese, whose numbers rose from 508,200 to 606,000 during 2003 because of the civil war in the south -where a peace agreement is all but concluded - and the new crisis in Darfur in the west of the country.
Civil war and a new conflict in
Sudan saw an increase of refugees
Other outstanding refugee populations were 606,000 Somalis and 531,000 people from Burundi who fled conflicts through the 1990s.
Significant returnees included Angolan refugees, whose number fell by one quarter to 323,600 following the end of the civil war there, and more than 50,000 Iraqi refugees who went home after Saddam Hussein was toppled last year.
The top asylum countries remained Pakistan, which hosts 1.1 million refugees and asylum seekers, Iran (985,000 people), Germany (960,000), Tanzania (650,000) and the United States (452,500).
But all of the top host countries saw declines of between two and 25% in their refugee and asylum populations, UNHCR said.