Israeli economy in recession: official data

JERUSALEM, May 17 (Xinhua) -- Israel's Central Bureau of Statistics (CBS) announced Sunday that the country is officially in a recession.

According to CBS's data, Israel's gross domestic product fell by 3.6 percent in the first quarter of 2009, following a 0.5 percent drop in the last three months of 2008. The formal definition of a recession is two consecutive months of negative economic growth.

Israeli business sector revenue fell at an annual rate of 4.2 percent in the first quarter of 2009, following a 1.6 percent drop in the last quarter of 2008 and a 1-percent rise in the third quarter of 2008, the data showed.

Imports of goods and services dropped 21.8 percent in the first quarter of 2009, while exports decreased by 14.4 percent, the date said.

Per capita expenditure was down 6 percent in the first three months of 2009 and investment in the Israeli economy decreased by 7.8 percent during the same period, according to the data.

Despite the recession, apartment prices in the Jewish country rose by 4.9 percent in the first quarter of 2009 as the positive trend in the real estate market continued.

Indicators point to China recovery

Special Report: Global Financial Crisis

BEIJING,May 5-- The economy is likely to expand 7 percent in the second quarter - up from the first quarter's 6.1 percent - even as it confronts the painful prospect of shedding industrial overcapacity, a top government think tank said Monday.

"Economic growth will pick up in the second quarter as the government's stimulus measures gradually take effect," the State Information Center (SIC) forecast.

"There has been preliminary success in arresting the economy's downward trend," it said, but did not mention any fallout from the global H1N1 flu alert.

But Zhu Baoliang, an SIC economist and one of the authors of the SIC report, said the economy will only be slightly affected by the H1N1 flu.

Annualized GDP growth sank to a decade's low in the first quarter, largely because of a collapse in export demand.

But analysts said the economy might have bottomed out since then as latest economic figures are increasingly upbeat.

The CLSA China Purchasing Managers Index (PMI), a gauge of manufacturing activity, rose to 50.1 in April, the first time it has been above 50 since last August, CLSA Asia-Pacific Markets said yesterday. A PMI reading above 50 indicates an expansion of the manufacturing sector, while a reading below 50 signals a contraction.

Also, the PMI index compiled by the Federation of Logistics and Purchasing rose for the fifth straight month in April to 53.5 percent, up 1.1 percentage points from a month earlier.

The positive economic signs sent stock markets up across Asia, with the mainland's Shanghai Composite Index rising 3.3 percent and Hong Kong's Hang Seng index 5.5 percent.

"The Chinese government has been extremely successful in stimulating investment," said Eric Fishwick, CLSA head of economic research. "We hope that firmer domestic demand, as government spending gains traction, will keep the PMI above 50 in the months to come."

The World Bank said in a report in early April that the Chinese economy is expected to bottom out by the middle of 2009. It also forecast China's economic growth at 6.5 percent for the year.

The International Monetary Fund also forecast last month that growth in China is expected to slow to about 6.5 percent this year.

Consumer spending held fast over the past months, despite looming unemployment pressure. About 2.68 million vehicles were sold in the first quarter, making the nation the world's largest auto market during the period.

Housing sales surged 23.1 percent by value while retail sales rose 15.9 percent in the first quarter, 3.6 percentage points higher than the same period a year earlier.

"Based on the clear uptrend in recent economic activity we believe the worst is already behind China in terms of economic growth," Sun Mingchun, chief China economist of Nomura International, wrote in a research note. Sun said China would achieve its 8 percent growth target this year, with a V-shaped growth trajectory.

But some analysts argue that the figures could be volatile and the economy has to deal with the structural problem of overcapacity.

"It's still too early to say the economy is experiencing a real recovery," said Zhu, the SIC economist. "Over the past months, local enterprises have been running down their inventories. Now they have to reduce overcapacity."

(Source: China Daily)

No increase in rates, hints PBOC

BEIJING,May 7-- The central bank will continue following a moderately loose monetary policy, its quarterly report said Wednesday, dispelling speculation that the stabilizing economy could prompt it to raise interest rates.

"The central bank will continue to ensure ample liquidity in the banking system and reasonably increase loans to fund the economy," the People's Bank of China (PBOC) report said.

The report also allays fears that a huge supply of loans in the first quarter could trigger a rise in property and other assets' prices, and thus lead to inflation.

"Positive changes have taken place in the economy and the situation was better than expected in the first quarter. But the foundation for a rebound is not yet solid," the report said. The credit growth has to increase further to counter the impact of a worsening world economy.

Tao Dong, chief Asia economist of Credit Suisse in Hong Kong, is certain about the normalization of the country's monetary policy. "China's economy is recovering faster than the rest of the world, so its monetary policy will normalize before other economies," he told Bloomberg.

The PBOC is likely to maintain the one-year lending rate at 5.31 percent this year and raise it by 99 basis points only next year, Tao said. But it could reinstate the quota system as early as the next quarter, limiting the lending by banks to check a possible rise in property prices because of the increase in the amount of new loans.

New loans reached a record 1.89 trillion yuan (277 billion U.S. dollars) in March, pushing the first quarter's total to 4.58 trillion yuan, very close to the 4.9 trillion yuan for the whole of last year and the 5 trillion yuan goal set for this year.

The strong quarterly growth came after the government relaxed its curbs on loan growth in November, and tried to boost the economy with "ample liquidity" and a 586 billion dollars stimulus package to counter the negative impact of the global financial crisis.

"Unless the economy signals a strong recovery, the PBOC will not change its monetary policy," Dong Xian'an, an analyst with Southwest Security, said. "It may tighten it a bit in the following months, though."

But many economists and experts have warned that despite the huge fiscal stimulus and some good signs in the first quarter, deflation is most likely to continue through the rest of the year.

(Source: China Daily)

No increase in rates, hints PBOC

BEIJING,May 7-- The central bank will continue following a moderately loose monetary policy, its quarterly report said Wednesday, dispelling speculation that the stabilizing economy could prompt it to raise interest rates.

"The central bank will continue to ensure ample liquidity in the banking system and reasonably increase loans to fund the economy," the People's Bank of China (PBOC) report said.

The report also allays fears that a huge supply of loans in the first quarter could trigger a rise in property and other assets' prices, and thus lead to inflation.

"Positive changes have taken place in the economy and the situation was better than expected in the first quarter. But the foundation for a rebound is not yet solid," the report said. The credit growth has to increase further to counter the impact of a worsening world economy.

Tao Dong, chief Asia economist of Credit Suisse in Hong Kong, is certain about the normalization of the country's monetary policy. "China's economy is recovering faster than the rest of the world, so its monetary policy will normalize before other economies," he told Bloomberg.

The PBOC is likely to maintain the one-year lending rate at 5.31 percent this year and raise it by 99 basis points only next year, Tao said. But it could reinstate the quota system as early as the next quarter, limiting the lending by banks to check a possible rise in property prices because of the increase in the amount of new loans.

New loans reached a record 1.89 trillion yuan (277 billion U.S. dollars) in March, pushing the first quarter's total to 4.58 trillion yuan, very close to the 4.9 trillion yuan for the whole of last year and the 5 trillion yuan goal set for this year.

The strong quarterly growth came after the government relaxed its curbs on loan growth in November, and tried to boost the economy with "ample liquidity" and a 586 billion dollars stimulus package to counter the negative impact of the global financial crisis.

"Unless the economy signals a strong recovery, the PBOC will not change its monetary policy," Dong Xian'an, an analyst with Southwest Security, said. "It may tighten it a bit in the following months, though."

But many economists and experts have warned that despite the huge fiscal stimulus and some good signs in the first quarter, deflation is most likely to continue through the rest of the year.

(Source: China Daily)

GM posts net loss of $6 bln for first quarter

CHICAGO, May 7 (Xinhua) -- General Motors Corp. (GM) posted a net loss of 6 billion U.S. dollars in the first quarter of this year amid a global economic downturn and low sales that have helped push the automaker to the brink of bankruptcy, reports reaching here from Detroit said Thursday.

According to a report by the Detroit News, GM spent 10.2 billion dollars more than it took in during the first quarter, a cash burn that was partially offset by 15.4 billion dollars in federal loans that has kept the company afloat since December.

GM ended the quarter with 11.6 billion dollars in cash and marketable securities, down from 14.2 billion dollars at the end of 2008.

The automaker's revenue was 22.4 billion dollars down from 42.4billion dollars in the first quarter last year.

The automaker, surviving on federal loans, has until June 1 to reach money-saving concessions with the United Auto Workers and bondholders or face a potential Chapter 11 bankruptcy filing.

GM President and Chief Executive Officer Fritz Henderson has said a bankruptcy filing is probable but not the preferred route.

"The rumors and speculation about bankruptcy had some impact in terms of our overall retail share performance," Chief Financial Officer Ray Young said Thursday. "That clearly impacted our overall level of sales and production," he said.

The loss comes on a day in which GM is restarting concession talks with the United Auto Workers and presses ahead with plans to cut plants, jobs, dealerships and eliminate about 44 billion dollars in debt as part of a broad restructuring plan.

GM's restructuring plan involves cutting 21,000 U.S. factory jobs by next year, 7,000 more than originally planned, and closing16 of its 47 U.S. manufacturing plants by 2012.

GM also reiterated Thursday that it plans additional cuts among the ranks of salaried employees and executives.

"This is a defining moment in the history of General Motors, and we are committed to our plan, which we believe will lead to a stable and sustainable operating structure with a strong balance sheet," Henderson said.

"Our goal is to fix this business once and for all to position ourselves to win in the long-term," he added.

U.S. non-farm productivity grows 0.8% in first quarter

WASHINGTON, May 7 (Xinhua) -- Productivity in the U.S. non-farm business sector grew at an annual rate of 0.8 percent in the first quarter of 2009, better than the 0.6 percent gain that economists had estimated, the Labor Department reported Thursday.

The first-quarter reading for productivity, the amount of output per hour of work, also was better than the 0.6 percent decline in the fourth quarter of 2008.

While productivity increased, wage pressures eased in the January-March quarter. Employers' unit labor costs, or costs of wages and benefits for each unit of output, increased at an annual rate of 3.3 percent, compared with a 5.7 percent spike in the previous quarter.

The Commerce Department reported last week that the gross domestic product, the economy's overall output of goods and services, shrank 6.1 percent in the first quarter after plunging 6.3 percent in the fourth quarter, marking the worst six-month performance in a half century.

Productivity is considered the key ingredient needed for rising living standards because it allows companies to pay their workers more without having to raise the price of their products, which fuels inflation.

Brazil's mining giant reports $1.36 bln earning in Q1

RIO DE JANEIRO, May 6 (Xinhua) -- Brazil's mining giant Companhia Vale do
Rio Doce (Vale) reported on late Wednesday a net earning of 1.4 billion U.S.
dollars in the first quarter of 2009, equal to 0.26 U.S. dollars per share on a
fully diluted basis.

The earning is roughly the same with the one registered in the fourth
quarter of 2008, but falling 32.6 percent from the same period last year.

Vale, the country's largest private company and the world's leading iron
ore producer, said that it is focusing on financial and operational flexibility
amid the economic turmoil, seeking to maximize efficiency and minimize costs.

Since the turmoil started, Vale has been suffering with the sharp reduction
in the demand for iron ore and other minerals, which led to falls in both sale
revenues and volume, and also led to the shutdown of several mines.

The company's operational profit, as measured by adjusted EBIT (earnings
before interest and taxes), fell to 1.68 billion U.S. dollars in the first
quarter of 2009, down 16.3 percent from the fourth quarter of 2008 and 42.2
percent from the first quarter of last year.

The operational margin was of 31.6 percent, up 27.7 percent from the fourth
quarter of 2008 but down 37.2 percent from a year ago.

The cash generation, as measured by EBITDA (earnings before interest,
taxes, depreciation and amortization), was of 2.28 billion U.S. dollars, down
15.4 percent from the fourth quarter of2008 and 38.8 percent from the first
quarter last year.

Gross revenues fell to 5.4 billion U.S. dollars, down 27.2 percent from the
fourth quarter of 2008 and 32.6 percent from the first quarter of 2008.

Investments, excluding acquisitions, fell to 1.7 billion U.S. dollars,
roughly the same amount registered in the same period last year, but down 50.5
percent from the fourth quarter of 2008.

GM posts net loss of $6 bln for Q1

CHICAGO, May 7 (Xinhua) -- General Motors Corp. (GM) posted a net loss of 6 billion U.S. dollars in the first quarter of this year amid a global economic downturn and low sales that have helped push the automaker to the brink of bankruptcy, reports reaching here from Detroit said Thursday.

According to a report by the Detroit News, GM spent
10.2 billion dollars more than it took in during the first quarter, a cash burn
that was partially offset by 15.4 billion dollars in federal loans that has kept
the company afloat since December.

GM ended the quarter with 11.6 billion dollars in
cash and marketable securities, down from 14.2 billion dollars at the end of
2008.

The automaker's revenue was 22.4 billion dollars down
from 42.4billion dollars in the first quarter last year.

The automaker, surviving on federal loans, has until
June 1 to reach money-saving concessions with the United Auto Workers and
bondholders or face a potential Chapter 11 bankruptcy filing.

GM President and Chief Executive Officer Fritz
Henderson has said a bankruptcy filing is probable but not the preferred route.

"The rumors and speculation about bankruptcy had some
impact in terms of our overall retail share performance," Chief Financial
Officer Ray Young said Thursday. "That clearly impacted our overall level of
sales and production," he said.

The loss comes on a day in which GM is restarting
concession talks with the United Auto Workers and presses ahead with plans to
cut plants, jobs, dealerships and eliminate about 44 billion dollars in debt as
part of a broad restructuring plan.

GM's restructuring plan involves cutting 21,000 U.S.
factory jobs by next year, 7,000 more than originally planned, and closing16 of
its 47 U.S. manufacturing plants by 2012.

GM also reiterated Thursday that it plans additional
cuts among the ranks of salaried employees and executives.

"This is a defining moment in the history of General
Motors, and we are committed to our plan, which we believe will lead to a stable
and sustainable operating structure with a strong balance sheet," Henderson
said.

"Our goal is to fix this business once and for all to
position ourselves to win in the long-term," he added.

U.S. economy to turn up later this year: Bernanke

WASHINGTON, May 5 (Xinhua) -- U.S. Federal Reserve Chairman Ben Bernanke told Congress Tuesday that the economy will begin to rebound later this year but the recovery will probably be slower than usual.

"We continue to expect economic activity to bottom out, then to turn up later this year," said Bernanke in prepared testimony to the Congress' Joint Economic Committee.

He noted that the housing market is beginning to stabilize and that the sharp inventory liquidation that has been in progress will slow over the next few quarters.

"Final demand should also be supported by fiscal and monetary stimulus," said Bernanke.

"An important caveat is that our forecast assumes continuing gradual repair of the financial system; a relapse in financial conditions would be a significant drag on economic activity and could cause the incipient recovery to stall," he added.

But the Federal Reserve chief also warned that even after a recovery gets under way, the rate of growth of real economic activity is likely to remain below its longer-run potential for a while.

"We expect that the recovery will only gradually gain momentum and that economic slack will diminish slowly," he said, "In particular, businesses are likely to be cautious about hiring, implying that the unemployment rate could remain high for a time, even after economic growth resumes."

The U.S. economy shrank at an annual rate of 6.1 percent in the first quarter of 2009, slightly smaller than the 6.3 percent drop in the previous quarter.

The worse-than-expected decline marked the third straight quarter of contraction for the world's biggest economy and signaled little improvement in a deep recession.

Many analysts were predicting the U.S. economy would shrink less in the current April-June period as the government's stimulus begins to take hold.

Net loss for media firm's first quarter

Special Report:
Global Financial
Crisis

BEIJING, May 5 -- Media company E.W.
Scripps, which earlier this year shut down
Denver's Rocky Mountain News, said yesterday that weak advertising spending and
a slew of charges led to a net loss in its first quarter.

Scripps, which owns newspapers and TV stations,
posted a loss of 220.7 million U.S. dollars, or $4.12 per share, compared with
income from continuing operations totaling $84.1 million, or $1.55 a share, in
the same quarter a year earlier.

Excluding one-off items, the latest quarter's loss
attributable to Scripps shareholders would have been $13 million, or 24 U.S. cents
a share. The items included a preliminary impairment charge of $192 million at
the company's TV stations, and operating losses and wind-down costs of $13.3
million at its newspapers operated under partnerships and joint agreements.

Revenue fell 20 percent to $205.4 million from
$255.7 million.

Analysts, on average, had expected a loss of 13 US
cents a share, excluding items, on sales of $202.3 million, according to a poll
by Thomson Reuters.

The company said closing the Rocky Mountain News
"eliminated significant financial risk."

"Operating losses and expenses related to the
shutdown were confined to the first quarter, so now we move ahead sadly but in a
much better position," said Rich Boehne, president and chief executive. Boehne
added, however, the second quarter had not shown any signs of improvement over
the first.

(Source: Shanghai Daily/Agencies)

Mexico energy giant reports huge loss on lower exports, prices

Special
Report: Global Financial Crisis

MEXICO CITY, May 4 (Xinhua) -- Mexico's state-run energy giant Petroleos
Mexicanos (Pemex) on Monday reported a net loss of 27 billion pesos (about 2.04
billion U.S. dollars) during the first quarter, due to lower oil prices and a
lower volume of exports.

"Exports were 1.2 million barrels a day, 14.6 percent lower than last year
due to lower crude prices," said Esteban Levin Bacells, Pemex's chief financial
officer, on a conference call with bank analysts.

"Total sales were down nearly 30 percent due to lower crude prices and
export volumes. Domestic sales also declined due to reduced natural gas demand,"
he said.

During the same quarter of 2008, the firm had exported nearly 1.5 million
barrels a day (bpd) of crude oil. Oil prices averaged around 38.92 dollars per
barrel during the first quarter, compared with 83.94 dollars during the first
quarter of 2008, a decline of around 54 percent.

Compared with the same period in 2008, Pemex produced 7.8 percent less
crude oil during the first quarter of 2009 due to the declining production of
Mexico's former main field Cantarell.

During the first quarter of 2009, Cantarell has an average daily output of
787,000 barrels while the number was 1.2 million during the same quarter of 2008
and 2.1 million bpd at during its peak quarter in 2005.

Walt Disney reports drop in second-quarter profit

LOS ANGELES, May 5 (Xinhua) -- The Walt Disney Co. in Burbank near Los Angeles suffered a 46-percent drop in second-quarter profit, compared to the same quarter a year ago, the company announced on Tuesday.

The company attributed the drop to the economic crisis and financial restructuring charges.

The company reported diluted earnings of 33 cents per share for the quarter that ended March 28, a 43-percent drop from the 58 cents per share in the prior year's second quarter. Net income for the quarter fell to 613 million dollars, down from 1.13 billion in the quarter a year ago.

The per-share earnings included a 10-cent-per-share hit attributable to restructuring and impairment charges, the company reported.

"We had a difficult second quarter due to the weak economy and other factors," said Robert Iger, Disney's president and chief executive officer.

"At the same time, we remain focused on our core business strategy and believe our creativity, brands and businesses will serve us well as the economy recovers."

Meanwhile, the company reported a 21-percent drop in revenue in its studio entertainment division and a 12-percent drop in parks and resorts.

Treasury: New Zealand's recession deepens

Special
Report: Global Financial Crisis

WELLINGTON, May 5 (Xinhua) -- New Zealand's Treasury predicted on Tuesday
that the country's recession deepened in the first quarter.

In its monthly update, the Treasury forecast that the Gross Domestic
Product shrank 1 percent in the first quarter, a sharper decline than any of the
four quarters of the recession to date.

The Treasury said data over the past month indicated that demand and output
contracted further in the first quarter.

It attributed the weakness to falls in household spending, business
investment and exports.

Growth estimates for New Zealand's trading partners are now well below
those contained in a previous update in December.

Official figures on the state of the economy in the first quarter are due
to be issued at the end of June.

The government's Budget report will be presented on May 28.

Net sales of Mexican glassmaking giant Vitro fall 34.5%

Special
Report: Global Financial Crisis

MEXICO CITY, May 4 (Xinhua) -- Mexican glassmaking giant Vitro said in a
Monday statement that it had lost 84 million dollars in the first quarter,
compared with the 30-million-dollar profit during the first quarter of 2008.

Net sales fell 34.5 percent in the first quarter compared with the same
period of 2008, due to a weaker peso and lower volumes. Export sales fell 37.6
percent while domestic sales fell 25.5 percent.

The firm said it also lost sales due to the spin-off of container maker
Comegua. Container sales fell an annualized 37.1 percent, while glass sales fell
31.5 percent.

Even so, margins rose by 12.7 percent compared with the same period a year
earlier.

Vitro, founded in 1909, is Mexico's largest glassmaker for construction,
industrial and domestic use, and has distribution centers in 10 nations across
the Americas and in Europe.

Berkshire's Q1 profit set to fall

Special Report: Global Financial Crisis

BEIJING, May 4 -- Warren Buffett says his holding
company, Berkshire Hathaway Inc, will report a roughly 10 percent drop in its
first-quarter operating profit this week.

Buffett offered a glimpse of Berkshire's
first-quarter earnings during the company's shareholders' meeting on Saturday.
But the full details, including Berkshire's net income, won't be available until
Friday when the company releases its earnings report.

Berkshire owns more than 60 subsidiaries including
insurance, clothing, furniture, and candy companies, restaurants, natural gas
and corporate jet firms. Berkshire also has major investments in such companies
as Coca-Cola Co and Wells Fargo Co.

Buffett says Berkshire will report an operating
profit of about US$1.7 billion in the first quarter. That's down from the US$1.9
billion in operating profit Berkshire reported in the same period a year ago.

Operating profit does not include gains and losses on
Berkshire's investments and derivatives, which have had a significant impact on
the Omaha-based company's reported profits in recent quarters.

In 2008, Berkshire recorded a largely unrealized
US$7.5 billion loss on derivatives and investments that dragged down profit.
Berkshire still reported a 2008 profit of US$4.99 billion, or US$3,224 per Class
A share, but that was down 62 percent from the previous year.

Berkshire's fourth-quarter results were worse.
Buffett's company reported net income of US$117 million, or US$76 per share,
down 96 percent from US$2.95 billion, or US$1,904 per share, in the same period
a year earlier.

Buffett said that in the first quarter, Berkshire's
utility and insurance businesses performed fairly well during the quarter. He
said profit from insurance underwriting should increase slightly because it's
not tied to the recession.

But many of Berkshire's other businesses, such as its
jewelry stores, Shaw carpet, Acme Brick and Clayton Homes, have been hurt.

(Source: Shanghai Daily)

Chinese listed companies net profit up 450% in Q1

Special
Report: Global Financial Crisis

BEIJING, May 4 (Xinhua) -- The combined net profit of
all the 1,624 listed companies in the Chinese mainland hit 203.8 billion yuan
(about 30 billion U.S. dollars) in the first quarter, up 450.39 percent from the
last quarter in 2008, reports from the country's two main exchanges showed
Monday.

Among them, 1,186 companies reported gains, taking up
73.03 percent of the total. The number of companies suffering losses increased
nearly 200 compared with the same period last year to 436.

The total net profit in the first three months
dropped 25.81 percent year on year.

"The quarter-on-quarter profit surge showed
production began to stabilize in the first three months after taking the major
blow from the global financial crisis in the fourth quarter last year," said Qin
Xiaobin, chief analyst with Beijing-based Galaxy Securities.

Measures issued by the government to support the key
industries also helped with the profit rise, experts said.

However, companies are still troubled with
over-capacity that led to the year-on-year decline and it is still too early to
tell if the overall economy has bottomed out, according to Qin.

Major advanced economies slide further into recession

Special Report:Global Financial Crisis

A man walks past a shop advertising a sale in Tokyo Jan. 30, 2009. The world's second largest economy is in the midst of its first recession in seven years as the global economic slowdown sharply reduced demand overseas for cars, electronics and other key exports. (Xinhua/Reuters Photo)
Photo Gallery

BEIJING, Feb. 17 (Xinhua) -- Japan's economy shrank
at its fastest pace in nearly 35 years in the fourth quarter of 2008, joining
other major advanced economies in sliding further into recession.

Japan, which is largely driven by exports, suffered a
loss of 12.7 percent in its gross domestic product (GDP) in the October-December
period last year, a government report said Monday, blaming the worsening
situation on plunging external demand, rapid deceleration of the world economy
and a stronger yen.

Earlier in October, Japanese Prime Minister Taro Aso
had unveiled a 27 trillion yen (275 billion U.S. dollars) stimulus package to
bolster the world's second largest economy.

In December, Japan's central bank cut its key
interest rate to 0.1 percent, lowering borrowing rates to nearly zero, and
adopted new measures to pour more money into the banking system to shake off a
widening credit crunch.

These moves in some way helped promote internal
demand, but were not enough to instantly pull the export-driven economy out of
recession as international demand for made-in-Japan continues to shrink amid the
spiraling global economic crisis.

However, Japan is only part of a gloomy global
picture. Recent data indicates that the major advanced economies of the world
are slipping further into recession despite governments' efforts to stimulate
growth.

In the United States, the economy plummeted at an
annualized rate of 3.8 percent in the fourth quarter of 2008, the worst since
1982, the U.S. Commerce Department said.

According to the country's Institute for Supply
Management, economic activity in the U.S. manufacturing sector failed to grow in
January for the 12th consecutive month.

Meanwhile, consumer spending, which accounts for
two-thirds of overall U.S. economic activity, recorded an unprecedented
six-monthly decline last December, indicating that the economy has yet to hit
bottom.

The government's newly passed 787 billion dollar
stimulus plan, which U.S. President Barack Obama described as a "major milestone
on our road to recovery," is yet to be tested for effectiveness, and
presidential aides have warned consumers not to expect instant miracles.

Further, the Wall Street Journal quoted economists as
forecasting that the United States will see an annualized GDP decline of 4.6
percent in the first three months of 2009 and a 1.5percent decline in the second
quarter.

Meanwhile in Europe, flash official figures released
last Friday suggest that GDP in both the European Union (EU) and the euro zone
contracted steeply in the fourth quarter of 2008, falling for the third quarter
in a row.

The 1.5 percent GDP decline in both the euro zone and
the EU from the previous quarter is even worse than the 1 percent contraction in
the U.S. economy during the same period.

The German economy, which is Europe's biggest, shrank
by 2.1 percent in the fourth quarter last year compared with the previous one,
representing the biggest decline since the country's reunification nearly two
decades ago.

Germany's reliance on exports of goods like cars and
factory equipment have made it particularly vulnerable to the global economic
turmoil and collapsing world trade.

In Britain, the central bank predicted last Wednesday
that the country's economy could shrink as much as 6 percent in 2009 compared
with the previous year, with rising unemployment, weak consumer spending and low
investment levels threatening to further dampen output.

The economies of France and Italy declined by 1.2
percent and 1.8 percent respectively versus the previous quarter, wiping out any
illusion that the euro zone is getting off lightly amid the worldwide meltdown.

Dominique Strauss-Kahn, head of the International
Monetary Fund, recently said that leading economies are already in depression,
adding that the worst was probably still to come, urging swifter and more
determined stimulus action from governments.

U.S. economy shrinks at 6.1% pace in first quarter

Special Report:Global Financial Crisis

WASHINGTON, April 29 (Xinhua) -- The U.S. economy shrank at an annual rate of 6.1 percent in the first quarter of 2009, compared with the 6.3 percent drop in the previous quarter, the Commerce Department reported on Wednesday.

Analysts had been expecting a decrease of 5 percent for the first three months of this year. The worse-than-expected decline marked the third straight quarter of contraction for the world's biggest economy and signaled little improvement in a deep recession.

"The decrease in real GDP in the first quarter primarily reflected negative contributions from exports, private inventory investment, equipment and software, non-residential structures, and residential fixed investment that were partly offset by a positive contribution from personal consumption expenditures," the department said.

"Imports, which are a subtraction in the calculation of GDP, decreased," it said.

Spending on equipment and software by businesses dropped by 33.8 percent, compared with a 28.1 percent decrease in the final quarter of last year.

Meanwhile, builders slashed their spending on commercial construction projects by 44.2 percent, much bigger than the 9.4 percent decline in the previous quarter.

Their residential spending also fell by 38 percent, the steepest drop since the second quarter of 1980.

Exports of goods in the January-to-March period plummeted at a 30 percent pace, the biggest drop since the first quarter of 1969,following the 23.6 percent plunge in the previous quarter.

Government spending decreased by 3.9 percent in the first quarter, the biggest decrease since the end of 1995. It also marked the first drop in government spending since the fourth quarter of 2007 following an increase of 7 percent in the fourth quarter of 2008.

However, consumers, who have been cutting their expenditure for two consecutive quarters, boosted spending by 2.2 percent in the first three months. The 2.2 percent growth rate was the strongest in two years.

Many analysts had predicted that the U.S. economy would shrink less in the current April-June period as the government's stimulus measures begin to take hold.

However, the recent outbreak of swine flu, which started in Mexico and has spread to the United States and elsewhere, poses a new potential danger. The flu could stifle trade and force consumers to cut back further on spending thus worsening the recession.

The International Monetary Fund (IMF) predicted the economy of the United States, at the center of a worsening global financial storm, will contract by 2.8 percent in 2009.

Despite large cuts in policy interest rates, credit is exceptionally costly or hard to get for many households and companies, which reflects severe strains on financial institutions, the IMF said last week in its latest World Economic Outlook report.

"In addition, households are being hit by large financial and housing wealth losses, much lower earnings prospects, and elevated uncertainty about job security, all of which have driven consumer confidence to record lows," it said.

The U.S. administration under Barack Obama is counting on the 787-billion-dollar stimulus package, which combines tax cuts and increased government spending on public projects, to help bolster economic activity later this year.

The administration has also unveiled a series of measures to rescue banks, curb home foreclosures and spur lending to businesses and consumers.

Vale's first quarter iron ore output down 37%

Special Report:Global Financial Crisis

RIO DE JANEIRO, April 28 (Xinhua) -- Brazil's mining giant Companhia Vale
do Rio Doce (Vale) announced on Tuesday that its iron ore output totaled 46.86
million metric tons in the first quarter of 2009, down 37.1 percent from the
same period last year.

Vale's iron ore output fell 25.9 percent compared to the last quarter of
2008, which already saw a substantial decrease of production.

Vale, the largest iron ore producer in the world, stated that it had been
facing "unprecedented weak demand conditions" caused by sharp decrease of global
industrial production, which was an effect of the international financial
crisis.

In order to reduce costs and adjust production to the decreasing demand,
the company decided to shut down its mines with higher cost and lower quality
while maintaining operational flexibility at the other mines.

The production of iron pellets registered an even worse decrease in the
first quarter, totaling 2.885 million metric tons, down 69.9 percent from the
fourth quarter 2008 and 73.4 percent from the same period last year.

Due to the weak demand, Vale kept only three of its nine pellet production
units in operation in the quarter. In March, two other units restarted operation
under an increased demand for iron pellets from China.

Manganese ore production in the first quarter was 113,000 metric tons, down
79.2 percent from the same period last year. Vale's largest manganese mine Azul
was shut down for almost the entire quarter due to the decrease of demand.

The output of ferroalloys totaled 48,000 metric tons, down 63.6percent from
the same period in 2008. Nickel 65,200 metric tons, down 10.9 percent from the
last quarter but up 7.3 percent from the same period last year.

Vale has already laid off 1,300 employees since the end of 2008 because of
the crisis. Another 5,500 employees were given collective vacations. The company
entered into an agreement with several trade unions recently, which foresaw no
dismissals until May 31. It is still not known whether the agreement will be
renewed.

Slovenian car sales drop by 22% in first quarter

BELGRADE, April 8 (Xinhua) -- Car sales in Slovenia fell by some 22 percent to 14,648 in the first quarter of 2009, the Slovenian news agency STA reported on Wednesday.

The car sales in March also fell by 22 percent compared to the same period last year, dropping to 5,731, the agency reported, citing a report of the Slovenian Chamber of Commerce.

Renault remained the top-selling brand in Slovenia in March with 753 cars sold. This is 29.4 percent less than in the same month of 2008.

The only car maker to increase its sales in March was Kia, which sold 337 cars, which is up 98.2 percent year-on-year.