Expectations Rise for New Stimulus Measures from China

Foreks - Expectations for stimulus are rising in China ahead of the crucial National People's Congress meeting scheduled for next week. Krishna Srinivasan, one of the IMF directors, stated that the real estate sector is the "elephant in the room" regarding China's economic recovery. Srinivasan emphasized that addressing the issues in the real estate sector is vital for boosting consumer and investor confidence.

"If this is done, domestic demand is likely to revive, and if local governments implement supportive measures, the situation may improve. China also needs to shift its economy from export and investment-driven growth to more consumption-driven growth," Srinivasan remarked, highlighting the need for increased investment in social safety nets, pension reform, and similar initiatives to steer demand towards consumption. According to the IMF, leveling the playing field between the private sector and state-owned enterprises will also open the economy to greater competition.