Slightly less than the expectations, but the US GDP shrank a huge 5.7 per cent in the first quarter this financial year amidst the global recession, considered the worst since the Great Depression in 1930s.

According to a commerce department report released on Friday, the corporate profits rebounded and there are hints that the recession was restraining a bit.

The country’s GDP, dropped at a 5.7 per cent annual pace 0.4 per cent less than the expected 6.1 per cent estimated by the government previous month.

The revisions were below market expectations for a 5.5% contraction for the January-March quarter. Output has declined for three straight quarters for the first time since 1974-1975.

According to the commerce department’s reports, the corporate profits after taxes increased 1.1 per cent in the first quarter after a huge 10.7 per cent downfall in the fourth quarter previous year.

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The United Nations has forecast that it is expecting the world economy to shrink by a staggering 2.6 per cent in the financial year 2009 amidst the global recession, slump in demand and subsequent sales.

In a mid year report released by UN Department of Economic and Social Affairs (DESA), the world body said, “The world economy is expected to shrink by 2.6% in 2009, according to the pessimistic scenario of the forecast presented in January.”

Earlier, in January, the UN had projected a 0.5 per cent drop for the current year.

According to Rob Vos, director of DESA’s Development Policy and Analysis Division, “We are less sanguine than some observers about possible green shoots emerging. If they are there they don’t give much sign of being spring time. It is still very wintry landscape.”

The ragging global recession is deeply affecting the demand and sales on a larger scale. The fiscal crisis poses a significantly larger threat to the world economic and social development.

The report also predicted that the world economy is expected to recover to an annual growth of 4-5 per cent around 2010-2015 coupled by a robust growth of 7 per cent in developing nations.

The ILO on Thursday announced that it is expecting the global unemployment forecast to shoot up to a record 239 million!

In its earlier projection this year, the ILO said up to 230 million people could be unemployed in the financial year 2009.

ILO on Thursday raised its earlier projection saying that about 239 million people can face the axe in the current financial year, all thanks to the deteriorating labor market globally.

International Labour Organisation Director-General, Juan Somavia said in Geneva, “The labour market situation has continued to deteriorate since the start of the financial crisis.

“In March, we estimated that global unemployment would increase in between 24 to 52 million in 2009 as compared to 2007. Our current projection suggests that the range will be between 39 to 59 million,” he further added.

Further, according to the projected figures, the global unemployment rate can range a staggering 6.8 per cent to 7.4 per cent. This anticipated record unemployment rate also surpasses the 6.5% in global unemployment reported in the year 2003. this was the highest level reached since 1991 when the ILO first began keeping records.

The US government may own 70% stake in the restructured General Motors, The New York Times has reported.

The ailing auto making giant is struggling hard to avoid the bankruptcy which now seems inevitable.
According to a report published in The New York Times, “The latest plan for the troubled automaker, which is expected to file for bankruptcy by Monday, calls for the treasury department to receive about 70% of a restructured GM.”

According to the sources involved, it has been reported that the government will be providing the auto making giant at least $50 billion to get the company through Chapter 11. A total of over $20 billion has already been spent to prop up the ailing automaker.

On the other hand, the United Automobile Workers (UAW) would hold up to 20% through its retiree health care fund. Rest of the stake is expected to be held by the bondholders and other parties, whereas the shareholders would be virtually wiped out

The global recession is slowly expanding its grip on other nations too. The latest one to be added is Thailand.

Thailand’s economy stepped into recession at the end of the first quarter of the current financial year 2009 as the country’s growth contracted by a huge 7.1 per cent due to tumbling exports and imports. This was confirmed by the official data released on Monday.

According to the figures released by the National Economic and Social Development Board, this quarter was the second in the row in which the national gross domestic product (GDP) fell. This comes after the 4.3 per cent contraction last quarter, i.e. the fourth quarter in the year 2008.

Ampon Kittiampon, the secretary general of the board said, “Growth has contracted for two consecutive quarters so it can be said that Thailand is in a period of recession.”

Britain’s economy shrank at its sharpest pace in almost past 30 years amidst the worst global recession since the Great Depression of the 1930s. According to the official data released on Friday, the British GDP shrank 1.9 per cent during the first quarter of the financial year 2009, its sharpest pace in near three decades.

The projected data was dot as per the expectations of the last month forecast. The British GDP shrank 4.1 per cent in the first quarter as compared to the initial three months of the year 2008.

Both the reported data figures match that of the figures projected by the experts and analysts.

According to Howard Archer, chief Britain economist at IHS Global Insight, “The good news is that it is looking highly likely that the first quarter will have marked the deepest rate of contraction in this recession.”

Taiwan’s economy shrank a staggering 10.2% year-on-year in the first quarter of 2009 according to the local government. This a record decline in the country’s economy!

Taiwan’s directorate-general of budget, accounting, and statistics announced on Thursday that they are expecting the country’s economy to contract further by a huge 4.25 per cent during the financial year 2009. The new forecast from the government is considerably higher than the previous forecast of 3 per cent.

The country’s economy shrank a huge 8.6% in the fourth quarter of 2008.

However, in a sharp contrast the Taiwan stock market is rising sharply. Since the last low point in January, it has gained a huge 50 per cent thanks to the expectations of improved investment and trade opportunities with China.

Indian software giant Infosys announced its plans on Thursday that the company is aiming to hire about 1000 new recruits in the US in the upcoming 12 to 18 months.

Out of the company’s present 1,04,000 combined workforce, a good 14,000 employees are based in the US.

The software company’s plans were revealed by the Infosys chief executive Kris Gopalakrishnan during an interview is in Seattle, Gopalakrishnan is in USA for Microsoft’s CEO Summit this week.

The company is expecting the growth to resume around the year 2010 and hence the company too is aiming to expand its workforce.

“We believe business will be there if we add capabilities, more services and solutions to our portfolio and increase the business volume with the existing customers — that’s how we see growth coming to our business,” Gopalakrishnan said.

The US government is all set to steer General Motors into bankruptcy and also plans to fund the auto making giant with billions of dollars in extra public financing.

According to the official plans the government is aiming to half the auto giant with about 30 billion dollars in extra federal loans. This is expected to raise the company’s federal debt to around a staggering 45 billion dollars

June 1 was the deadline for the troubled General Motors to prove its viability. However, the company is currently under high pressure to manage to avoid the same. The company is jumbled up in getting concessions from the powerful United Auto Workers union.

The union, UAW, on the other hand, said on Thursday that it had reached a “tentative understanding” with GM and the US Treasury on contract changes aimed at preventing bankruptcy.

GM is currently funding its operations with more than 15 billion dollars in emergency government loans.