South America

Brazil’s recession deepened in the third quarter into what economists say is the country’s worst crisis since the Great Depression, as political gridlock and a giant corruption scandal have halted investment and forced consumers to pare spending to the bone, The Wall Street Journal reported. Gross domestic product shrank 4.5% in the third quarter from a year earlier, the biggest contraction since Brazil started measuring GDP by the current system in 1996, Brazil’s statistics agency said Tuesday.

Automotores Gildemeister SA, a Chilean car dealer, agreed to cede options to buy 40 percent of the company to its bondholders as part of a restructuring of debt. The company failed to pay a coupon on its 2021 bonds that was due Tuesday, Bloomberg News reported. Gildemeister reached a preliminary agreement with holders of about 70 percent of its $700 million in dollar bonds due in 2021 and 2023 to swap the notes for new bonds guaranteed by real estate and other assets, according to an e-mailed statement.

Argentine President-elect Mauricio Macri plans to push through economic reforms that will buy him time for a "tough negotiation" with U.S. hedge funds suing the country over unpaid government debt, Bloomberg News reported. The pro-business Macri, who narrowly won Sunday's presidential election, vows to get the stalled economy moving again but needs to settle a decade-long legal battle with the holdout creditors before he can return to global credit markets.

A spiraling economic crisis has pushed Brazil’s emerging middle class to the brink, The Wall Street Journal reported. Urban unemployment rose to 7.6% in September, tied with August for the highest rate in more than five years. Inflation approaching 10% has forced the poor to stop buying meat and the central bank to ratchet up interest rates. A disorganized effort by the government to stem a widening budget deficit has resulted in painful tax increases, further crimping family budgets.

In Brazil, many captains of finance are unwilling to risk upsetting the government by expressing their concerns publicly about the country’s economic crisis. Don’t put Jose Olympio Pereira in that group. Just seconds into an interview in Sao Paulo last week, the CEO of Credit Suisse Group AG’s Brazil unit made his views crystal clear when, in response to a question about the state of affairs in the country, he replied: "we are very bad." And when he says "very bad," he means it.

Brazilian President Dilma Rousseff, who is struggling to get the country’s Congress to pass legislation meant to curb a widening budget gap, faces more resistance from members of her own party than almost any other grouping, according to a recent survey of lawmakers, The Wall Street Journal reported. Ms. Rousseff’s left-wing Workers’ Party is reluctant to embrace spending cuts and tax increases and favors stimulus policies instead, according to the poll of members of the lower house of Brazil’s Congress by political consultancy firm Mosaico.

Embattled Brazilian President Dilma Rousseff has long been criticized by business interests for her economic policy as growth sputtered, budget deficits ballooned and inflation and interest rates soared. But now she facing increasingly strident calls for the ouster of her finance minister from an unusual source: her own left-wing party, The Wall Street Journal reported.

In the smog-filled, run-down industrial hubs that ring the southern end of Sao Paulo, Brazil’s next big crisis is taking root, Bloomberg News reported. The labor market, long the country’s lone economic bright spot as growth stagnated, is suddenly deteriorating rapidly, driving unemployment all the way up to 7.6 percent from a record-low 4.3 percent at the end of 2014. Nowhere are the layoffs that are fueling that surge more acute than here, in this gritty complex of steel, auto and auto-parts factories built decades ago by the likes of Ford Motor Co. and Volkswagen AG.

As financial leaders gather this week to assess the health of the world economy, one of the central topics for discussion will be how ready markets are for a crisis in a large developing economy such as China, Turkey or Brazil, the International New York Times reported. At the center of this debate will be the question of whether the International Monetary Fund still has the ability to act effectively if — as some experts fear — emerging markets begin to crumble under the weight of heavy debt.

President Dilma Rousseff of Brazil announced Friday that she was cutting her salary by 10 percent, reducing the size of her cabinet and slashing thousands of coveted jobs for political appointees in an effort to build support for broader austerity measures as she grapples with calls for her ouster, the International New York Times reported. The moves by the beleaguered leader, which reduce the number of cabinet ministries to 31 from 39 and extend the pay cut to the vice president, Michel Temer, and all of her ministers, reflect how Ms.