:00:04. > :00:14.members on board. Those are the latest headlines. Now
:00:14. > :00:23.
:00:23. > :00:28.for the latest financial news on The IMF downgraded its growth
:00:28. > :00:32.forecast for China, saying that it needs to rein in lending but --
:00:32. > :00:36.that many warned is fuelling inflation and property speculation.
:00:36. > :00:46.It makes the cheapest car in the world but Tata Motors is still set
:00:46. > :00:50.
:00:50. > :00:55.to report a record loss at its Welcome to World Business Report.
:00:55. > :00:59.Also in the programme: It will fly in European economies be given the
:00:59. > :01:03.green light by Brussels to move on from austerity? -- flagging
:01:03. > :01:09.economies. The IMF has just cut its growth
:01:09. > :01:16.forecast for China to 7.5 and 5% from a previous 8%, citing a week
:01:16. > :01:20.world economy -- 7.75 %. The IMF also said that the country's
:01:21. > :01:30.priority should be on reining in the easy credit in China that many
:01:30. > :01:38.warned his feeling property Nice to see you. Talk us through
:01:38. > :01:42.this IMF warning. We have been reporting about the slowing Chinese
:01:42. > :01:47.growth for some time. This is because demand for products made in
:01:47. > :01:52.China has been quite weak in the US and Europe where the crisis has
:01:52. > :01:57.been. As you say, what is worrying about it today's revision is that
:01:57. > :02:04.last month the IMF itself was forecasting growth of 8% this year
:02:04. > :02:08.and 8.2% next year but that has been revised down to 7.75 %. That
:02:08. > :02:14.is still great elsewhere in the world but the Chinese economy has
:02:14. > :02:18.been growing for double digits for months. As was said by the first
:02:18. > :02:24.managing director of the IMF who held a press conference in Beijing,
:02:24. > :02:27.he also said that if the group began to slope below the IMF
:02:27. > :02:31.forecast, then the Chinese government should consider a
:02:31. > :02:35.stimulus measure due boost the economy. This has not been done
:02:35. > :02:39.because China's government has been trying not to let the economy
:02:39. > :02:43.overheat when it was growing by double digits. It was trite rely
:02:43. > :02:49.less on exports for growth by boosting domestic consumption. This
:02:49. > :02:53.is still in the efforts. It is interesting that they should
:02:53. > :02:58.highlight this worrying about easy lending in China that many say
:02:58. > :03:06.could lead to property bubbles bursting, and other headaches for
:03:06. > :03:11.the Chinese authorities. Exactly. Property prices have been rising
:03:11. > :03:16.for -- quite significantly. Inflation has been one of the be
:03:16. > :03:21.issues which the new leadership has been facing. The IMF is warning
:03:21. > :03:26.that the reform should go ahead in order not to let the inflation go
:03:26. > :03:32.out of hand. At the same time, growth is slowing and manufacturing
:03:32. > :03:37.has been slowing because of falling demand for its exported products.
:03:37. > :03:41.It is a tricky task which the Chinese government has on its hands.
:03:42. > :03:45.Thank you very much indeed. There has been an effect on the market
:03:45. > :03:49.which we will look at later. It could have been one of the best
:03:49. > :03:54.time the deals in recent corporate history. Tata Motors bought Jaguar
:03:54. > :03:59.Land Rover in 2008. At the time, many thought that the British car
:04:00. > :04:04.makers would be a drag on the in the in vehicle producer. Since then,
:04:04. > :04:09.demand for Land Rover and Jaguar cars have soared, particularly in
:04:09. > :04:13.China and Brazil. At home, Tata Motors has been suffering months of
:04:14. > :04:23.falling sales and in a few hours it is expected to reveal a record loss
:04:24. > :04:25.
:04:25. > :04:33.It is a household name in India, which found international fame when
:04:33. > :04:37.it launched the World's smallest and cheapest car. Tata Motors is
:04:37. > :04:43.one of India's biggest automobile makers but for the last six months,
:04:43. > :04:46.sales of its passenger cars have been flagging. India was one of the
:04:46. > :04:51.world's hot as car markets for most of the last decade, growing at a
:04:51. > :04:56.rapid pace in 2011. The tide seems to have changed in the last year,
:04:56. > :05:00.with car sales fall in the first time in 12 years. A slowing economy
:05:00. > :05:07.coupled with high interest rates has kept customers away and Tata
:05:07. > :05:12.Motors is one among many carmakers here being affected. In April, the
:05:12. > :05:17.sales were down nearly 50% from the same period one year earlier. I
:05:17. > :05:22.import costs have added to the burden. In an interview to the BBC
:05:22. > :05:29.last month, Tata Motors' managing director said that the company had
:05:29. > :05:32.failed to identify growth segments. In India, it is important to ensure
:05:32. > :05:36.that to bring new products to the market and the bridge and then into
:05:36. > :05:41.the segments which will grow. It is not always all segments which will
:05:41. > :05:46.show growth. If the company could have done anything different - not
:05:46. > :05:49.this year, we couldn't - but if we had had our binoculars on in terms
:05:49. > :05:52.of understanding the past, in terms of what kind of industries would
:05:52. > :05:58.grow and make sure that we had our product offering a line with what
:05:58. > :06:02.is happening in the industry. Motors is one of India's biggest
:06:02. > :06:06.makers of trucks and buses. This is the only business segment that has
:06:06. > :06:14.seen growth so far this year. Experts say that it needs to
:06:15. > :06:20.broaden the product offering in India. It needs to increase its
:06:20. > :06:26.portfolio and launch products. This is so that it can remain with
:06:26. > :06:29.customer choices and the White and the markets. Luxury brands like
:06:29. > :06:35.Jaguar and Land Rover had been one bright spot with all its sales in
:06:35. > :06:39.emerging markets like China. Analysts expect these trends to be
:06:39. > :06:44.expanded when the company reports full-year earnings. There are also
:06:44. > :06:54.looking for plans for fresh new models if Tata Motors is to rev up
:06:54. > :06:54.
:06:54. > :06:56.The European Commission is expected to give the clearest indication
:06:56. > :07:00.that some were the key economies which are struggling to see
:07:00. > :07:04.economic growth will be allowed to miss Budget deficit targets. Today,
:07:04. > :07:08.France, Spain, and the Netherlands could be given a waiver on the
:07:08. > :07:14.annual 3% deficit limit. It is hoped that this will give them free
:07:14. > :07:17.rein to see -- to take measures to speed up reform and create jobs.
:07:17. > :07:25.The Commission would like to see France further liberalise the
:07:25. > :07:27.labour market and reform the pensions system. With me is Claus
:07:27. > :07:30.Vistesen, Head of Research at Variant Perception which is an
:07:30. > :07:36.independent economic research provider. They queue for coming in.
:07:36. > :07:40.This is something which we had been expecting to -- that could come. It
:07:40. > :07:45.is an interesting shift. The fact that some economies will be allowed
:07:45. > :07:50.to miss targets. Absolutely. It is a key shift we have seen in the
:07:51. > :07:56.last six months. Both the Commission, Germany, the IMF - they
:07:56. > :07:59.have all eased back on the push for austerity. That has two aspects.
:07:59. > :08:05.The first aspect is what we have spoken about today, where countries
:08:05. > :08:11.will be allowed to take a longer time to bring in their deficits
:08:11. > :08:16.which means they will have to cut less. That means other were burden
:08:16. > :08:20.on growth. Secondly, it frees up time to start these much-needed
:08:20. > :08:25.reforms. All in all, things are looking better in Europe because
:08:25. > :08:29.the market is not putting so much pressure on those countries and
:08:29. > :08:34.France which allows Germany and the IMF to give these countries more
:08:34. > :08:39.time. The Commission, is it paid to say that they are not abandoning
:08:39. > :08:42.fiscal discipline and that in return for the waiver or the
:08:42. > :08:46.freedom given to these economies, they too want to see real change
:08:46. > :08:52.occurring in some countries where France and others may be seen to
:08:52. > :08:56.take some time to see this happen? Obviously, they want to avoid
:08:56. > :09:00.complacency settling in. It does tended to settle in when the market
:09:00. > :09:05.does not put pressure on bond markets. There is a carrot and a
:09:05. > :09:11.stickier. We have seen more carrot and stick in the last few months --
:09:11. > :09:16.and a stick here. We would expect this to continue towards the German
:09:16. > :09:22.election where Germany would like to see things at be just as calm as
:09:22. > :09:26.they are now. We have to be the bare. They queue for coming in and
:09:26. > :09:32.giving us your perspective. We will keep you up-to-date on that if and
:09:32. > :09:39.when these announcements come to -- come through -- thank you.
:09:39. > :09:43.In other news, prosecutors in the US have indicted in the people who
:09:43. > :09:46.they say are running the largest online bank for criminals. They
:09:46. > :09:50.said that Liberty Reserve base in Costa Rica luck pornographers and
:09:50. > :09:54.hackers to switch money between accounts without any money being
:09:54. > :09:59.asked. In total, they say that Liberty Reserve lauded $6 billion.
:09:59. > :10:04.Leading staff including the company's founder were arrested
:10:04. > :10:10.last Friday in Spain, Costa Rica, and New York. We will discuss this
:10:10. > :10:14.story in more detail in the papers. Belgian international food retailer
:10:14. > :10:17.Delhaize said on Tuesday it was selling 155 of its stores in the
:10:17. > :10:20.United States. This is part of its efforts to consolidate its business.
:10:20. > :10:23.The deal, worth $265 million will see Delhaize divest 155 shops to
:10:23. > :10:33.BI-LO Holdings, which will also acquire the leases for 10
:10:33. > :10:37.
:10:37. > :10:42.The markets were all pretty strong and robust today enter we had their
:10:42. > :10:46.news from the IMF which caused more weakness in Hong Kong. Not a huge
:10:46. > :10:49.response to that because, of course, the Chinese government had been
:10:49. > :10:54.warning themselves about the fact that their growth this year would
:10:54. > :10:57.not be as strong as previously had thought. The IMF news is not a new