China'a Fork In The Road / Easter Eggs Bid Only
At the China Development Forum, the IMF’s Managing Director Kristalina Georgieva said she believes the world’s second-largest economy faces “a fork in the road”, whether to stick to its tried and tested policies that have worked in the past to a lesser or greater degree, or push for high-quality growth.
Georgieva added that: "With a comprehensive package of pro-market reforms, China could grow considerably faster than a status quo scenario". The IMF believe these pro-market reforms could unleash a 20% expansion of the real economy over the next 15 years, which in today's terms would equate to adding USD3.5tn to the Chinese economy. The IMF also upgraded its estimate that China’s economy will grow 4.6% in 2024, 0.4% point higher than its last forecast in October, and 0.4% below China’s own forecast.
However, Georgieva also warned that China had pressing near-term challenges, including transitioning the property sector on to a more sustainable footing and reducing local government debt. In order for this to happen China needs to take "decisive steps" to complete unfinished housing stranded by bankrupt developers and to reduce risks from local government debt she said. In doing so, China could "accelerate the solution to the current property sector problems and lift up consumer and investor confidence". She went on to say that: "A key feature of high-quality growth will need to be higher reliance on domestic consumption", adding that this "depends on boosting the spending power of individuals and families".
Finally, as we approach Easter, the price of your Easter eggs next year might be a lot higher than the ones you bought this year. Cocoa futures are up 50% this month alone and have more than doubled since the turn of the year. The combination of aging trees, diseases, bad weather and demand has combined to create the largest shortfall seen in the cocoa market in more than sixty years.
On Monday, cocoa futures closed at nearly $10,000 a ton, up 8% from Friday’s close, up 250% in the last few months, making it more expensive than copper.
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