28/02/2014 World Business Report

latest financial news with Maryam Moshiri and World Business Report.

Tough times for millions of Indians as the country battles its weakest

growth in a decade. We have a special report. Plus ` Ukraine's

currency slumps to an all`time low as the IMF says it's ready to step

in. Welcome to World Business Report.

I'm Maryam Moshiri. In a moment ` China's currency has had its biggest

fall against the Dollar on record. We'll be finding out what's going

on. We start this Friday in India `

where there's likely to be more pressure on Prime Minister Manmohan

Singh over the state of the economy. Official figures are expected to

show growth is still languishing at its weakest level in around a

decade. In the last three months of 2013 India's GDP probably grew at an

annual rate of 4.9 per cent, according to economists polled by

Reuters. If confirmed, that would be barely up on the previous quarter `

and around half the rate achieved in recent years. That's taking its toll

on many ordinary people, as Yogita Limaye reports from the Indian state

of Haryana. It is not bright enough to light up

this small room and more darkness may lie ahead for this couple. This

man recently lost his job in a car parts factory. His wife is pregnant

due to give birth soon. But she has had to get a job to keep them going

at least for a while. Every morning, he makes his way to factories in the

area hoping to find some work. TRANSLATION: Whichever company I go

to, they say that there is a slow down and there is less production.

They're not hiring any workers write`down. I have been looking for

two or three months for a job that get the same everywhere. He is not

alone. Manufacturing is considered the big job generated here. That has

been slowing for the past three months with many others bearing the

brunt as well. More than half of the country 's 1.2 billion people are

under the age of 25. There have not yet been large`scale job cuts but a

drop in employment creation is still a big worry. While manufacturing has

had a rough ride over the past year, it has been quite a different story

in farms like these across India. The Havers has been good this season

and that has prevented the economy from a steep slide. This farmer

grows wheat and mustered in his fields. Good rainfall over the past

season has helped farmers like him, he says. The production of wheat in

particular has increased substantially and that has put some

money in their hands. TRANSLATION: During the season last year we had

good celebrations. We could afford to spend some money. My son bought a

car. But this is all thanks to the weather gods. Who knows how long it

will last and what it would be like Visio? `` this year. The country

cannot afford to take comfort from the 4.9% growth rate. Strong action

from the government, making it easier to business, is what industry

is calling for. Elections are due soon and many are hoping that if a

stable government comes to power growth could turn a corner. Until

then, things here in India are unlikely to pick up pace.

To Ukraine now, where the International Monetary Fund say they

will send a team in the coming days to assess the economic situation.

Ukraine's finance ministry has warned it needs 35 billion dollars

over the next two years to avoid defaulting on its debt. The

political crisis has sent Ukraine's currency ` the hryvnia ` plunging.

On Thursday it sank another five and a half per cent, falling to 10.7 to

the US Dollar. That's the weakest since it was introduced back in

1996. There could be tougher times ahead for Ukrainians too ` as any

help from the IMF is likely to mean tough austerity measures. With me is

Tim Ash, head of emerging markets research at Standard Bank.

You have been looking at this story. The fact is that the IMF will want

something back. What will stir at you have been looking at this story.

The fact is that the IMF will want something back. What will stir it in

lookalike in the needs to do some clear`cut things. Fiscal

consolidation, cutting spending, raising revenues, to close the

budget deficit. Energy sector reform is very important. The budget

deficit, much of it, is because Ukraine has very high energy

subsidies. The price that houses pay is about a fifth of the import

price. Energy prices have to rise. It is important for getting rid of

corruption. Other parts of the programme are likely to be

exchange`rate liberalisation. We have already seen that, the currency

is already becoming more competitive. There is also banking

sector reform needed. The weaker exchange rate will create a hole in

the banking sector which will need to be filled. What do you think this

will mean in terms of political influence? It is different when

Russia is offering money and the IMF is offering money. Ukraine is in the

problem that it is on the economic front because it is not then run

well for the past two decades. This is not free money. The IMF want

meaningful and serious reforms. I mention these reforms earlier. It is

also things like cleaning up the business environment, getting that

of corruption, making Ukraine are good and interesting place for

foreign investment. That will be a long and hard road, especially if we

look at the currency and how it has been devalued. People are moving

away from it as quickly as they can. It is a terrible situation at the

moment. The financial and banking systems at the point of collapse.

The IMF will initially tried to figure out what is going on. They

will send a negotiating mission a couple of weeks after that to figure

out the size of the programme on the specifics. Thank you very much.

China's currency has also seen its biggest weekly fall, down almost a

percentage point. `` daily fall. Let's talk to our correspondent. If

you think about the Chinese currency, it is one of the most

argued about when it comes to global trade. If you remember the

accusations of the US, that's China keeps its currency artificially low

to give exports and advantage. But the currency has actually been

appreciating against the US dollar. Until now. It has dropped by about

0.8% to a ten month low. That does not sound very much but you have to

remember that the Chinese government limits how much the currency can

move. That trading band is just 1% of either side of the day the

reference rate. It could be heading for the biggest ever weekly loss.

But will not go until later today. This fuel speculation that the

central bank of China will double that trading band by the end of

June. That makes sense when you realise that China wants to promote

its currency for use in finance. That also helps to discourage

speculators. Thank you very much. In other news, International

Airlines Group ` formed from the merger between British Airways and

Iberia ` reports annual results later this Friday. The group is

expected to have bounced back after a torrid year of losses at the

Spanish airline. Iberia has recently struck deals with cabin crew and

pilots over new labour conditions designed to help it compete with low

cost rivals and end a history of strikes.

Talks are due to resume between the world's top three platinum producers

and South Africa's striking AMCU union this Friday. The strike over

pay is now in its fifth week and has taken out more than 40 per cent of

global supply of the precious metal. Union bosses want basic wages more

than doubled ` the mining firms are offering up to nine per cent. A

brief look at the Asian markets. Some more news today. An independent

assessment