PANAMA CITY, June 3 (Reuters) - Child malnutrition costs Central America billions of dollars a year, a burden that undermines its efforts to wipe out poverty, a U.N. report said on Sunday.

The joint study by the U.N. World Food Program and Economic Commission for Latin America found that child malnutrition cost Central America and the Dominican Republic $6.7 billion in 2004 alone, or 6.4 percent of their gross domestic product.

It calculates the effects of malnutrition on health, education and productivity. It estimates costs such as increased health care and education needs as well as decreased economic activity through lower productivity.

"Child hunger is a moral issue but as this study demonstrates it is also a critical economic concern," United Nations Secretary-General Ban Ki-moon said at the U.N. offices in Panama.

"These findings amount to nothing short of a call to action," he said. "I hope that governments, national leaders and all interested parties will heed this warning and push forcefully to increase and sustain the measures to fight hunger and undernutrition."

The United Nations estimates that 800,000 children under 5 are malnourished in Central America and the Dominican Republic, or 14 percent of children in that age group. It said the high cost of child malnutrition was the result of decades of inaction.

Jose Luis Machinea, head of the Economic Commission for Latin America, said the effects of child malnutrition were also passed on to future generations.

"Undernutrition has very serious long-term costs which are not limited to an individual's life-cycle given the impact on intrauterine growth during pregnancy of malnourished women," he said.

"This cycle will more probably be repeated in their offspring and poverty will be perpetuated generation after generation if we don't act to remedy the situation."