Mexico's Private Consumption Fell 1.3% On Year In 4Q - Inegi

Private household consumption in Mexico fell in the fourth quarter of 2008 for the first time in more than five years as the economy turned negative and credit became harder to come by. The National Statistics Institute, or Inegi, said Friday that private consumption fell 1.3% from the fourth quarter of 2007 - its first year-on-year decline since the second quarter of 2003. Aggregate demand in the fourth quarter fell 3.2% from a year earlier, with the drop in private consumption and an 8.8% decline in exports partially offset by a 0.1% increase in government consumption and a 0.6% increase in fixed investment. Robust domestic consumption had been sustaining growth in the economy thanks in part to several years of solid credit expansion. Banks began to cut back on consumer lending last year, however, as the rate of nonperforming credit card loans increased. For the full year, private household consumption rose 1.5%. Gross domestic product fell 1.6% in the fourth quarter, and is also expected to contract this year as a result of the U.S. recession and weak domestic demand.

Hungary PM Proposes Setting Up New Government With New PM

Hungarian Prime Minister Ferenc Gyurcsany unexpectedly proposed to his Socialist Party on Saturday that they set up a new government headed by a new premier. The Prime Minister unveiled his proposal at a two-day Socialist Party Congress that started Saturday. Gyurcsany's minority Socialist government has faced street protests for years while it struggled to implement fiscal measures. Gyurcsany also proposed to the Socialist Party Congress that they hold an extraordinary congress in two weeks' time and name a new prime minister. State new agency MTI said Saturday that Gyurcsany is planning to call a no confidence vote against his government. Local news portal index.hu said that Gyurcsany offered his resignation to the leadership of the Socialist Party earlier Saturday, saying that his stepping aside may lead to a more efficient crisis management and reform process was necessary. In a speech delivered to the Socialist Party Congress, Gyurcsany admitted to having made several mistakes in his recent years as head of government and said his credibility had been severely marred by these mistakes. The unexpected resignation of Gyurcsany comes at a time when the government's popular support hit an all-time low and the country is facing an economic contraction this year. Gyurcsany's move is likely to shake domestic financial markets, which have been under selling pressure since October 2008, when the global financial crisis hit Hungary severely. The government was forced to secure a $25 billion credit facility from the International Monetary Fund, the World Bank and the European Union to secure the country's financing. Gyurcsany stressed that the government should continue the reform process.

UPDATE: Hungary PM Gyurcsany Calls For New Government, New Premier

Battered Hungarian Prime Minister Ferenc Gyurcsany unexpectedly tendered his resignation Saturday calling on his Socialist Party to set up a new cabinet headed by a new premier so that the necessary reform process can be carried out with wider support. "If I'm the obstacle to change, then I'll eliminate this obstacle," Gyurcsany said at a conference of the ruling Socialist Party. The Socialists, who govern in minority, will hold an extraordinary party congress April 5 when they'll name their new prime minister candidate, Socialist Member of Parliament Monika Lamperth said Saturday. Gyurcsany proposed that the Socialists inform parliament about his decision Monday and that they start negotiations regarding the person of the new prime minister. The Socialists "have scenarios for (naming) a new prime from either within the party or from the outside," state news service MTI quoted Socialist Parliamentary Caucus Leader Ildiko Lendvai said Saturday. MTI said Gyurcsany wants to call a no-confidence vote in Parliament against himself and his cabinet, but the agency didn't name sources. Under Hungarian legislation, one-fifth of MPs have to back a no-confidence vote and they also have to name their candidate for the prime ministerial post. If the majority of Parliament express their lack of confidence in the prime minister, the proposed premier automatically becomes the new head of government. Gyurcsany's minority Socialist government has faced street protests for years while it struggled to implement fiscal measures. "I hear messages that I'm the reason why there isn't sufficient social coherence, a stable governing majority and a sober opposition," Gyurcsany said in a speech. Gyurcsany, who was the first prime minister to be reelected to the post since Hungary's return to democracy in 1990, admitted to having made several mistakes in his recent years as head of government and said his credibility had been severely marred by these mistakes. "I have been mistaken regarding our power and our possibilities, in moments of great importance I've failed to speak up clearly, my credibility has therefore been seriously damaged," the prime minister said. A speech delivered by Gyurcsany to a closed Socialist Party meeting in October 2006 sparked mass protests in Hungary as the prime minister had admitted his government had lied "night and day." Gyurcsany's and the government's popularity has been on the decline ever since and nose-dived in recent months as the global economic crisis hit Hungary in full force. In a poll published earlier this week by pollster Median, 91% of Hungarians said that the country was headed in the wrong direction. Hungary has entered an economic recession in the last quarter of 2008 and the government projects this year's economic contraction at 3-3.5% while analysts believe the recession could be as deep as 4-5%. Gyurcsany's move is likely to shake domestic financial markets, which have been under selling pressure since October 2008, when the global financial crisis hit Hungary severely. The government was forced to secure a $25 billion credit facility from the International Monetary Fund, the World Bank and the European Union to secure the country's financing. In his speech Saturday, Gyurcsany stressed that the government should continue the reform process.

Venezuela Santander Unit Costs Less Than Yr Ago -Chavez

The Venezuelan unit of Spanish giant Grupo Santander, which the government plans to nationalize, costs less than it did a year ago, President Hugo Chavez said Saturday. "Don't think that it costs the same than a year ago" Chavez said in nationwide television address.

Venezuela Reduces 09 Budget Spending Plans By 6.7% -Chavez

President Hugo Chavez revealed his plans to adapt his spending projects to the decline in state revenue triggered by the collapse in the price of oil and the global economic slowdown. Venezuela will lower its oil price forecast to $40 per barrel from $60 per barrel, which is used to calculate its 2009 budget, Chavez said. The government will also reduce its 2009 budget by 6.7%, shrinking it to 156.4 billion bolivars ($72.7 billion). The measures are geared "to confront a great threat that originates in the economic model defended by the national bourgeois," Chavez said before unveiling the measures Saturday during a countrywide television address. The president staunchly defended his government's socialist-inspired agenda and pledged that the plan would "protect what we've been achieving."

Venezuela Reduces 09 Budget Spending Plans By 6.7% -Chavez

President Hugo Chavez revealed his plans to adapt his spending projects to the decline in state revenue triggered by the collapse in the price of oil and the global economic slowdown. Venezuela will lower its oil price forecast to $40 per barrel from $60 per barrel, which is used to calculate its 2009 budget, Chavez said. The government will also reduce its 2009 budget by 6.7%, shrinking it to 156.4 billion bolivars ($72.7 billion). The measures are geared "to confront a great threat that originates in the economic model defended by the national bourgeois," Chavez said before unveiling the measures Saturday during a countrywide television address. The president staunchly defended his government's socialist-inspired agenda and pledged that the plan would "protect what we've been achieving."

Venezuela To Increase Value-Added Tax To 12% From 9% -Chavez

Venezuela will increase its value-added tax and almost triple its domestic debt issue plans to counteract a drop in the price of oil that is squeezing the government's finances. President Hugo Chavez said Saturday in a countrywide television broadcast that the government will increase the value-added tax to 12% from the current 9%. The government will also almost triple its domestic debt issue plans to 34 billion bolivars ($15.8 billion) from the previous forecast of VEB12 billion. Chavez ruled out devaluing the currency, which is pegged to the dollar at rate of 2.15 bolivars. He also said that he won't increase the price of gas, which is among the cheapest in the world. Venezuela will lower its oil price forecast to $40 per barrel from $60 per barrel, which is used to calculate its 2009 budget, Chavez said. The government will also reduce its 2009 budget by 6.7%, shrinking it to 156.4 billion bolivars ($72.7 billion). The measures are geared "to confront a great threat that originates in the economic model defended by the national bourgeois," Chavez said before unveiling the measures Saturday during a countrywide television address. The president staunchly defended his government's socialist-inspired agenda and pledged that the plan would "protect what we've been achieving."