TOKYO (AFP) - Japan said on Monday it was trapped in its worst economic downturn since World War II, revealing a huge setback just after the G7 called for urgent action to confront an accelerating global crisis. The worldwide recession dominated debate at a week end meeting in Rome of Group of Seven finance chiefs, with Italian Finance Minister Giulio Tremonti saying the situation called for nothing short of "a new world economic order." But analysts were unimpressed. "This weekend's G7 meeting was long on rhetoric and short on action," said Mitul Kotecha of Calyon. "Although officials appeared keen to show that they meant business there was no new plans or measures announced. "Concerns about protectionism were expressed as expected but ultimately the language in the communique was relatively benign." Ukraine, struggling to arrange another instalment of a loan from the International Monetary Fund, meanwhile suffered a fresh blow on Monday when Standard and Poor's warned of a possible cut in the country's credit ratings. With the world looking to the United States, the engine of the global economy , for salvation, President Barack Obama was preparing to sign a massive economic stimulus plan approved by Congress. The Japanese economy , the world's second largest, shrank for a third straight quarter in the three months to December as a worldwide recession clobbered demand for Japanese exports. The government said the slump was even worse than the recession of the 1990s when the country's economic bubble burst, ushering in a decade of economic stagnation and deflation. Japan's economy contracted by 3.3 percent in the fourth quarter of 2008 " 12.7 percent on an annualised basis, official data showed. It was the weakest performance since 1974 when the country was reeling from the first oil crisis, and the government said this slump would be even more severe. "This is the worst ever crisis in the post-war era. There is no doubt about it," Economic and Fiscal Policy Minister Kaoru Yosano said, warning that a rebound is impossible before the global economy improves. The current recession will be Japan's "longest, deepest and most severe in the post-war period," said Glenn Maguire, chief Asia economist at Societe Generale in Hong Kong. On Monday, hundreds of laid-off temporary workers rallied in Japan, urging companies to give them social protection. About 300 workers demonstrated outside the Tokyo headquarters of major corporations including truckmaker Isuzu Motors, telecommunications firm NTT and Mizuho Bank, as well as Japan's main business lobbyist group, the Keidanren. The government estimates at least 125,000 temporary contract workers have been laid off or will be fired by March when the fiscal year ends. In a joint declaration, the G7 called for "urgent reforms" to the international financial system and reiterated a bleak outlook for the world economy . Obama on Tuesday will sign a 787-billion-dollar stimulus package, combining public works spending and tax cuts, into law, setting the seal on the first major legislative triumph of his presidency. "I think it's safe to say that things have not yet bottomed out," White House spokesman Robert Gibbs told CNN Sunday. But US states will start getting the stimulus money "relatively quickly," he said, "so they don't have to lay off police officers or firefighters or teachers" and can begin to create alternative energy jobs.