29/05/2013 World Business Report

members on board. Those are the latest headlines. Now

for the latest financial news on The IMF downgraded its growth

forecast for China, saying that it needs to rein in lending but --

that many warned is fuelling inflation and property speculation.

It makes the cheapest car in the world but Tata Motors is still set

to report a record loss at its Welcome to World Business Report.

Also in the programme: It will fly in European economies be given the

green light by Brussels to move on from austerity? -- flagging

economies. The IMF has just cut its growth

forecast for China to 7.5 and 5% from a previous 8%, citing a week

world economy -- 7.75 %. The IMF also said that the country's

priority should be on reining in the easy credit in China that many

warned his feeling property Nice to see you. Talk us through

this IMF warning. We have been reporting about the slowing Chinese

growth for some time. This is because demand for products made in

China has been quite weak in the US and Europe where the crisis has

been. As you say, what is worrying about it today's revision is that

last month the IMF itself was forecasting growth of 8% this year

and 8.2% next year but that has been revised down to 7.75 %. That

is still great elsewhere in the world but the Chinese economy has

been growing for double digits for months. As was said by the first

managing director of the IMF who held a press conference in Beijing,

he also said that if the group began to slope below the IMF

forecast, then the Chinese government should consider a

stimulus measure due boost the economy. This has not been done

because China's government has been trying not to let the economy

overheat when it was growing by double digits. It was trite rely

less on exports for growth by boosting domestic consumption. This

is still in the efforts. It is interesting that they should

highlight this worrying about easy lending in China that many say

could lead to property bubbles bursting, and other headaches for

the Chinese authorities. Exactly. Property prices have been rising

for -- quite significantly. Inflation has been one of the be

issues which the new leadership has been facing. The IMF is warning

that the reform should go ahead in order not to let the inflation go

out of hand. At the same time, growth is slowing and manufacturing

has been slowing because of falling demand for its exported products.

It is a tricky task which the Chinese government has on its hands.

Thank you very much indeed. There has been an effect on the market

which we will look at later. It could have been one of the best

time the deals in recent corporate history. Tata Motors bought Jaguar

Land Rover in 2008. At the time, many thought that the British car

makers would be a drag on the in the in vehicle producer. Since then,

demand for Land Rover and Jaguar cars have soared, particularly in

China and Brazil. At home, Tata Motors has been suffering months of

falling sales and in a few hours it is expected to reveal a record loss

It is a household name in India, which found international fame when

it launched the World's smallest and cheapest car. Tata Motors is

one of India's biggest automobile makers but for the last six months,

sales of its passenger cars have been flagging. India was one of the

world's hot as car markets for most of the last decade, growing at a

rapid pace in 2011. The tide seems to have changed in the last year,

with car sales fall in the first time in 12 years. A slowing economy

coupled with high interest rates has kept customers away and Tata

Motors is one among many carmakers here being affected. In April, the

sales were down nearly 50% from the same period one year earlier. I

import costs have added to the burden. In an interview to the BBC

last month, Tata Motors' managing director said that the company had

failed to identify growth segments. In India, it is important to ensure

that to bring new products to the market and the bridge and then into

the segments which will grow. It is not always all segments which will

show growth. If the company could have done anything different - not

this year, we couldn't - but if we had had our binoculars on in terms

of understanding the past, in terms of what kind of industries would

grow and make sure that we had our product offering a line with what

is happening in the industry. Motors is one of India's biggest

makers of trucks and buses. This is the only business segment that has

seen growth so far this year. Experts say that it needs to

broaden the product offering in India. It needs to increase its

portfolio and launch products. This is so that it can remain with

customer choices and the White and the markets. Luxury brands like

Jaguar and Land Rover had been one bright spot with all its sales in

emerging markets like China. Analysts expect these trends to be

expanded when the company reports full-year earnings. There are also

looking for plans for fresh new models if Tata Motors is to rev up

The European Commission is expected to give the clearest indication

that some were the key economies which are struggling to see

economic growth will be allowed to miss Budget deficit targets. Today,

France, Spain, and the Netherlands could be given a waiver on the

annual 3% deficit limit. It is hoped that this will give them free

rein to see -- to take measures to speed up reform and create jobs.

The Commission would like to see France further liberalise the

labour market and reform the pensions system. With me is Claus

Vistesen, Head of Research at Variant Perception which is an

independent economic research provider. They queue for coming in.

This is something which we had been expecting to -- that could come. It

is an interesting shift. The fact that some economies will be allowed

to miss targets. Absolutely. It is a key shift we have seen in the

last six months. Both the Commission, Germany, the IMF - they

have all eased back on the push for austerity. That has two aspects.

The first aspect is what we have spoken about today, where countries

will be allowed to take a longer time to bring in their deficits

which means they will have to cut less. That means other were burden

on growth. Secondly, it frees up time to start these much-needed

reforms. All in all, things are looking better in Europe because

the market is not putting so much pressure on those countries and

France which allows Germany and the IMF to give these countries more

time. The Commission, is it paid to say that they are not abandoning

fiscal discipline and that in return for the waiver or the

freedom given to these economies, they too want to see real change

occurring in some countries where France and others may be seen to

take some time to see this happen? Obviously, they want to avoid

complacency settling in. It does tended to settle in when the market

does not put pressure on bond markets. There is a carrot and a

stickier. We have seen more carrot and stick in the last few months --

and a stick here. We would expect this to continue towards the German

election where Germany would like to see things at be just as calm as

they are now. We have to be the bare. They queue for coming in and

giving us your perspective. We will keep you up-to-date on that if and

when these announcements come to -- come through -- thank you.

In other news, prosecutors in the US have indicted in the people who

they say are running the largest online bank for criminals. They

said that Liberty Reserve base in Costa Rica luck pornographers and

hackers to switch money between accounts without any money being

asked. In total, they say that Liberty Reserve lauded $6 billion.

Leading staff including the company's founder were arrested

last Friday in Spain, Costa Rica, and New York. We will discuss this

story in more detail in the papers. Belgian international food retailer

Delhaize said on Tuesday it was selling 155 of its stores in the

United States. This is part of its efforts to consolidate its business.

The deal, worth $265 million will see Delhaize divest 155 shops to

BI-LO Holdings, which will also acquire the leases for 10

The markets were all pretty strong and robust today enter we had their

news from the IMF which caused more weakness in Hong Kong. Not a huge

response to that because, of course, the Chinese government had been

warning themselves about the fact that their growth this year would

not be as strong as previously had thought. The IMF news is not a new