* BHP calls off bid for Rio Tinto, citing economic slowdown
* China growth to slow to about 7.5 percent in 2009 - World Bank
* Paulson to launch consumer loans plan, EU stimulus coming
* European stocks slip, Citigroup rescue relief over
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By Alan Wheatley and Mike Peacock
BEIJING/LONDON, Nov 25 (Reuters) - Slowing Chinese growth and confirmation of major nations contracting painted a bleak economic picture on Tuesday, a backdrop which miner BHP Billiton cited in abandoning a mega-bid for Rio Tinto.
Amid the worst financial crisis in 80 years, BHP Billiton called off its $58 billion hostile bid for rival Rio, a move which caught markets on the hop.
"We have concerns about the continued deterioration of near-term global economic conditions, the lack of any certainty as to the time it will take for conditions to improve and the risks that these issues imply for shareholder value," BHP Chairman Don Argus said in a statement.
China, the world's biggest consumer of many metals, this month unveiled a 4 trillion yuan ($586 billion) spending package to prop up its economy, but growth would still likely slow to around 7.5 percent in 2009, the World Bank said.
That would be China's slowest growth since 1990 and below a pace of 8 percent that conventional wisdom suggests is needed to absorb newcomers to the workforce.
With economies flagging, stimulus measures continue apace.
After Britain announced on Monday a 20 billion pounds fiscal boost, including a 2.5 points cut in value-added tax, the United States and European Union will put their shoulders to the wheel.
U.S. Treasury Secretary Henry Paulson plans to announce on Tuesday a programme to increase the availability of auto loans, student loans and credit cards, the Wall Street Journal reported, citing people familiar with the matter.
The U.S. Treasury will contribute between $25 billion to $100 billion to the facility from its $700 billion Troubled Asset Relief Program, the paper said. The European Commission will propose on Wednesday measures to stimulate the recession-hit European economy including VAT cuts and a call for lower European Central Bank rates.
A draft proposal, seen by Reuters, did not specify the size of the stimulus plan, which Germany said last week could be worth some one percent of European Union GDP.
RECESSION A REALITY
That more action is needed to curb recession worldwide is not in doubt.
The second snapshot of third-quarter U.S. economic activity, due at 1330 GMT, is expected to show the economy shrank a little more than first estimated in the third quarter, by 0.5 percent rather than 0.3, driven by a sharp drop in consumer spending.
A further deterioration is expected this quarter, putting the world's largest economy in recession.
Official data confirmed Germany is in recession for the first time in five years, with foreign trade a big drag on gross domestic product in the third quarter.
"We are facing a long recession -- at least until the middle of next year but with a risk that it lasts longer," said Andreas Rees at Unicredit.
French business sentiment in November fell to its lowest level in 15 years as gloom among company heads deepened as a result of the global financial crisis, data showed on Tuesday.
What started more than a year ago as a meltdown in the U.S. market for high-risk mortgages has engulfed the world, freezing access to credit, sparking bank collapses and requiring the financial bailout of entire countries.
CITI SILVER LINING FADES
Corporate gloom was not limited to the abandoned miners' merger, eclipsing relief at the rescue of number two U.S. bank Citigroup.
Australia's Qantas airline said demand had slowed, forcing it to cut its 2009 profit forecast and further reduce capacity.
The president of Japan's Canon told Reuters that the global market for digital cameras may contract next year as consumer demand shrinks.
And Honda, the world's top motorcycle maker, said sales could stop growing in 2009 as the credit crisis catches up with emerging markets.
The U.S. government's weekend rescue of Citigroup provided some respite for battered equity markets, following a surge on Wall Street the previous session.
Japan's Nikkei average rose 5.2 percent but respite was short-lived. European shares dropped 1.2 percent in early trade as Rio shares slumped.
In Oman, Gulf Arab finance and foreign ministers were meeting to hammer out a final agreement on a joint central bank for the six members of the Gulf Cooperation Council.
The global turmoil is taking an increasing toll on the oil-rich region and has given a sense of urgency to the long-standing plan for monetary union.. (Editing by Keith Weir)