Company: SCAG
Filing Date: 2025-01-06
Form Type: 424B3
Source: 0001213900-25-001215
Chunk: 906

Company: Scage Future
Filing Date: 2025-01-06
Form: 424B3
Chunk 906
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 demand. Shadow banking appears to have stabilized and credit supply is ample, but demand is rebounding only gradually. Savings accumulated during the lockdowns may be used partially in the real estate market if it recovers more strongly, and partially for household consumption. Fiscal policy will continue to provide support through tax cuts and exemptions, but tax and charge deferrals have mostly ended. Some proceeds from special local bonds issued in 2022 are being spent this year. New policies are being announced to boost the recovery, including tax exemptions for small and micro enterprises and accelerated deduction of research costs. Development banks are providing funds financed by bonds to support investment, as a lack of funds has constrained the roll-out of infrastructure projects. Sizeable interest subsidies continue to support re-lending for manufacturing, social services, small and medium-sized companies, and individual businesses. Following the lifting of COVID-19 restrictions, GDP growth will gradually return to its estimated potential rate. Infrastructure investment will remain robust and real estate investment will stabilize due to lower mortgage rates and improving consumer confidence. Exports will recover as global demand rebounds. Export growth will be driven by the global need for equipment for the energy transition. Reopening will boost tourism imports, but import growth may be contained by an increasing reliance on domestic inputs. Raw material demand will be kept high by infrastructure investment. Longer-term growth prospects have diminished as the population ages, constraining the strength of the recovery. A further rise in corporate defaults will improve risk pricing but may adversely affect the financial sector and private investors. A stable supply of energy and grains will continue to contain price increases, keeping headline inflation benign. Relatively high unemployment, especially for youth, slow job creation and a more gradual recovery of consumption remain a key downside risk. Continued credit events and disorderly deleveraging in the overstretched property sector may trigger failures of smaller banks and shadow banking institutions. By contrast, relaxing prudential measures and encouraging investment in real estate would likely create another bubble and subsequently cause greater future disruptions. A stronger rebound of housing prices could divert savings to the real estate sector and revive housing-related consumption. Reforms to enhance competition would sustain the economic recovery from the pandemic. Administrative monopolies, often with exclusive rights to provide certain goods and services, should be dismantled. Recent measures aimed at creating a single domestic market are a welcome step. Stronger consumer protection could boost competitive pressures. Levelling the playing field would support private sector investment and underlying growth. Fundamental reforms to strengthen the social safety net would help to reduce precautionary saving and rebalance demand from