Contrary to government forecasts the Uruguayan economy plunged 2.9% in the first quarter of this year putting an end to 18 uninterrupted quarters of sustained growth. Although government officials downplayed the impact of the retraction, private analysts said this signals the beginning of a recession period in line with what is happening globally.
The world's newest economic grouping, BRIC is to hold its first summit in the Russian city of Yekaterinburg beginning Tuesday. BRIC is named after its four member states - emerging giants Brazil, Russia, India and China; they account for 13% of global GDP and 40% of world population.
Brazilian President Lula da Silva urged unions and workers on Monday to take advantage of the global financial crisis to help forge a new world economic order. He also criticized multilateral organizations for having no plans to address the current global crisis.
French President Nicolas Sarkozy has warned of political and social unrest unless there is greater regulation of the globalized economy. He argued that the current system of speculation and dumping cannot continue. We have to overhaul everything, he said. He called for a larger role for social institutions in financial regulation.
The European Central Bank (ECB) warned on Monday that the crisis facing the banking sector is not over, despite unprecedented government efforts to support banks.
Moody's Investors Service on Monday cut the senior ratings of 25 Spanish banks, citing expectations of further capital pressures. As well as broader economic pressures, the banks' asset quality indicators continue to point towards a further significant deterioration, Moody's said.
President Lula da Silva said that Brazil is overcoming the current global crisis and is in a position to teach other countries how to address the adverse economic situation.
The dollar has risen after Russian finance minister Alexei Kudrin said it would not be replaced as the world's reserve currency in the near future. Earlier in the week, Russian President Dmitry Medvedev and Chinese central bank governor Zhou Xiaochuan had both questioned the dollar's status.
The US government is planning a major overhaul of the system of financial regulation to avoid future crises. The broad outlines of the plan were revealed on Monday by US Treasury Secretary Tim Geithner and White House economic adviser Larry Summers.
Argentine president Cristina Fernandez de Kirchner in the midst of a tough battle to retain power in Congress in this month’s mid term election took the political debate to Switzerland where she addressed the annual meeting of the International Labour Organization, (ILO).