Economic Growth – Avance Economico http://avanceeconomico.com/ Sat, 18 Sep 2021 22:33:16 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 http://avanceeconomico.com/wp-content/uploads/2021/07/icon-7.png Economic Growth – Avance Economico http://avanceeconomico.com/ 32 32 RSTEC aims to transform the economic reality of RGV http://avanceeconomico.com/rstec-aims-to-transform-the-economic-reality-of-rgv/ Sat, 18 Sep 2021 22:33:16 +0000 http://avanceeconomico.com/rstec-aims-to-transform-the-economic-reality-of-rgv/ BROWNSVILLE, Texas – The Rio South Texas Economic Council is a non-profit organization that brings together the economic development interests of cities, counties, chambers and educational institutions, workforce councils, ports, businesses and other stakeholders working for regional prosperity. Our mission is to successfully promote the economic expansion and diversification of communities in the Rio South […]]]>

BROWNSVILLE, Texas – The Rio South Texas Economic Council is a non-profit organization that brings together the economic development interests of cities, counties, chambers and educational institutions, workforce councils, ports, businesses and other stakeholders working for regional prosperity.

Our mission is to successfully promote the economic expansion and diversification of communities in the Rio South Texas area by improving knowledge of the region’s many strengths among potential investors, fostering the growth of the local economy, and enhancing competitiveness to attract investment and jobs.

RSTEC aims to transform the economic reality of the region by facilitating the expansion of value-added industries to attract foreign direct investment or FDI, with the aim of proving the residents of the region with economic opportunities. We hope to accomplish this by spearheading the region’s economic development marketing efforts, filling the existing white space by developing relationships, value-added industry thought leaders, influencers and decision-makers from under-represented global markets in the region.

René Xavier Gonzalez

RSTEC develops these relationships by engaging them in their organizations, conferences, exhibitions, that is to say on their own ground. RSTEC strengthens their understanding of the region through one-on-one conversations as well as bringing them to the region for tours and site visits, where they in turn are in contact with RSTEC board members.

Founded in 2008 and constantly evolving since, RSTEC’s activities have made significant progress since adopting its current strategic direction in 2016, which is focused on developing a platform to attract foreign direct investment, which itself has evolved with each successful annual work program. . And RSTEC plans to build on it for the remainder of 2021.

With an ongoing commitment to our members to build brand recognition for the Rio South Texas region in order to advance the attraction of FDI, RSTEC has a clear vision of where and how we should spend our resources in 2021 and beyond. The challenges RSTEC faces along this path center on its limited resources in the most effective and efficient manner to pursue our strategic coalition building, marketing and transformation priorities.

The Rio South Texas Economic Council has a diverse membership that includes public and private entities interested in promoting and developing the region’s collective assets in a way that attracts private sector investment, economic diversification, and business expansion. companies.

At RSTEC, we hope that the following industrial virtual tour will be informative and highlight some of the many industrial assets of the Rio Grande Valley. We hope that many of you will continue to support RSTEC and keep our amazing community in mind in all future industrial projects.

Editor’s Note: The above comment was given by René Xavier González, Executive Director of the Rio South Texas Economic Council during a webinar that featured a virtual tour of industrial parks in the Rio Grande Valley. The webinar featured virtual tours of industrial parks in Brownsville, Matamoros, Harlingen and Weslaco. The economic development efforts of the Texas Governor’s Office were also featured, along with a question-and-answer session led by representatives from UT-Rio Grande Valley. The attached podcast features the webinar.


Editor’s Note: The above story and podcast are the second in a four-part series. Click here to read Part 1, which provides an update on Brownsville’s economic development. Part three, providing an update on Harlingen’s economic development, will be published in our next issue.


Quality journalism takes time, effort and…. Money!

Producing quality journalism doesn’t come cheap. The coronavirus has caused a drop in income in newsrooms in the United States. However, The international information service of the Rio Grande Guardian is committed to producing quality news reporting on the issues that matter to border residents. The support of our members is essential to ensure the achievement of our mission.

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Wall Street Outlook: Wall Street Week Ahead: Growth? Value? Some investors go for a bit of both http://avanceeconomico.com/wall-street-outlook-wall-street-week-ahead-growth-value-some-investors-go-for-a-bit-of-both/ Sat, 18 Sep 2021 07:32:00 +0000 http://avanceeconomico.com/wall-street-outlook-wall-street-week-ahead-growth-value-some-investors-go-for-a-bit-of-both/ NEW YORK: Some investors are playing a standoff this year between so-called growth and value stocks by holding companies straddling the two categories, as uncertainties mount over the trajectory of the US economy in the months to come . Value stocks, which trade at relatively cheap multiples of their fundamentals, surged in early 2021 as […]]]>
NEW YORK: Some investors are playing a standoff this year between so-called growth and value stocks by holding companies straddling the two categories, as uncertainties mount over the trajectory of the US economy in the months to come .

Value stocks, which trade at relatively cheap multiples of their fundamentals, surged in early 2021 as hopes of an economic rebound boosted stocks of banks, energy companies and other economically sensitive names. after years of underperformance.

Their performance against growth stocks has fluctuated since then, with signs of an economic rebound in the United States tending to benefit growth stocks, which are less tied to fluctuations in the economy and have dominated the market during the most of 2020. The Russell 1000 Value Index is up 16.2%. year-to-date, just behind the 18.6% recorded by the Russell 1000 Growth Index on Friday at noon. The benchmark S&P 500 is up about 18% this year.

As a COVID-19 resurgence and an imminent unwinding of the Federal Reserve’s easy-money policies cloud the economic outlook, “you don’t see a great backdrop for deep value or mega-growth names, so we think you can find some great companies in the industry, ”said David Marcus, portfolio manager of the Evermore Global Value fund.

Marcus is venturing into companies like French media conglomerate Vivendi SA, whose growth prospects he believes will improve after an expected split from a stake in Universal Music Group later this month. On the value side, Vivendi has a portfolio of economically sensitive media and pays a dividend of 1.8%.

Investors will be keeping a close eye on next week’s Federal Reserve meeting, which ends on Wednesday, for details of the central bank’s plans to withdraw emergency support to the economy. The European Central Bank and the Bank of Japan will conclude their meetings on the same day.

Some fund managers were also concerned about the comparatively high valuations of growth stocks, which helped push the S&P price-to-earnings ratio near its highest level since the 2001 dot-com bubble.

These concerns have led Matthew McLennan, co-head of the Global Value team at First Eagle Investment Management, to own shares in companies such as logistics company CH Robinson Worldwide Inc.

A large recovery that increases the number of global shipments could benefit the company’s operations, he said. At the same time, McLennan is betting that the company’s growing market share and relatively low valuation of 16.8 times future earnings will make it attractive if worries about global growth prompt a flight to quality stocks.

“You don’t have to chase the ‘glamorous stocks’ which are quite expensive,” he said.

The search for companies with both growth and value attributes comes at a time when Wall Street analysts are lowering their expectations for stocks.

Banks such as BofA, Morgan Stanley, Citi and Credit Suisse cut their recommended exposure to equities last week, while Goldman Sachs lowered its forecast for US economic growth in the third quarter on August 19 to 5.5% against 9% due to the impact of the Delta variant.

A disproportionate rally in value stocks in battered industries like cinemas and cruise ships, like the one seen in the first three months of this year, is unlikely to repeat itself even if the Delta variant turns out to be less. disruptive to the economy that many fear, said David Park, portfolio manager of the Nuveen Santa Barbara Dividend Growth Fund.

Yet at the same time, he doubts growth stocks will pick up on last year’s scorching rally due to their strained valuations.

Instead, Park is looking for companies like discount retailer TJX Companies Inc, which he says has taken market share from shopping mall clothing stores. The company reinstated its share buyback program in late May and resumed its dividend in December after cutting both in response to the pandemic, giving it a value slant, he said.

Its shares are up 3.2% for the year.

“We’re usually stuck in purgatory because we can’t invest in the highest growth non-dividend payers, nor are we interested in lower quality stocks,” Park said. “We are waiting … for more opportunities like this.”


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Cyclical stocks fell. Two signs that they are doomed to increase. http://avanceeconomico.com/cyclical-stocks-fell-two-signs-that-they-are-doomed-to-increase/ Fri, 17 Sep 2021 17:23:00 +0000 http://avanceeconomico.com/cyclical-stocks-fell-two-signs-that-they-are-doomed-to-increase/ Text size Industrials stocks were held back by concerns about inflation and economic growth. The time of dreams Cyclical stocks have been declining recently, but concerns about economic growth do not seem likely to get any worse. Investor interest in these stocks may soon return. Industrials, hardware and banking were three of the worst performing […]]]>

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Disconnection from labor market raises concerns about economic recovery | News, Sports, Jobs http://avanceeconomico.com/disconnection-from-labor-market-raises-concerns-about-economic-recovery-news-sports-jobs/ Fri, 17 Sep 2021 05:32:41 +0000 http://avanceeconomico.com/disconnection-from-labor-market-raises-concerns-about-economic-recovery-news-sports-jobs/ FILE – In this file photo from Tuesday, July 27, 2021, a help-seeking sign is displayed at a gas station in Mount Prospect, Ill. The gap between record-breaking job openings and the shortage of people filling those jobs is forcing Wall Street to reassess the pace of the economic recovery. (AP Photo / Nam Y. […]]]>

FILE – In this file photo from Tuesday, July 27, 2021, a help-seeking sign is displayed at a gas station in Mount Prospect, Ill. The gap between record-breaking job openings and the shortage of people filling those jobs is forcing Wall Street to reassess the pace of the economic recovery. (AP Photo / Nam Y. Huh, file)

The gap between record-breaking job openings and the shortage of people filling those jobs is forcing Wall Street to reassess the pace of the economic recovery.

Jobs were cut during the pandemic and job growth has been a closely watched indicator for investors. Increased employment ultimately leads to increased consumer spending, which is the main engine of economic growth. Without the first, analysts said it will take longer than expected for the economy to function at semblance of normal before the pandemic.

“This time horizon is getting longer,” said Rob Haworth, senior investment strategist at US Bank Wealth Management.

The Ministry of Labor reported that vacancies reached 10.9 million in July, the highest recorded in 2000. Yet there were around 8.7 million people considered to be unemployed during that same year. months, which is the largest such gap between available jobs and unemployed since the Labor Department began tracking job postings in 2000.

Typically, the gap is much wider in the other direction, with more unemployed than job vacancies.

The increase in COVID-19 cases is one of the main culprits in the job divide. People are reluctant to return to work due to health concerns as the highly contagious delta variant spreads, analysts said. Many are also concerned about child care as schools open for a new year with a high level of unpredictability due to the virus.

More than 22 million jobs were lost in March and April 2020 when the pandemic caused widespread business closures. About 16.8 million of those jobs returned through July 2021 in a seemingly rapid recovery, but the jobs crisis remains even more severe as the recessions of 1974, 1981, 1990 and 2001 were at their worst, according to Ross Mayfield, Investment Strategist at Baird.

“Labor market developments are among the most significant in the world today,” Mayfield said in a note to investors. “A late recovery will keep the Federal Reserve on the sidelines, but will also limit economic growth.”

The Federal Reserve is also closely monitoring the recovery in the job market. The central bank has made it a priority to maintain its policy of keeping interest rates low until it is satisfied with the recovery in employment. This has left investors torn between the balance between the benefits of a slow job recovery that prolongs low interest rates and the damage to longer-term growth if the economy continues to struggle for recovery. full recovery.

The inability to regain any semblance of full staff means that many businesses, especially in the service sector, cannot take full advantage of increasing consumer demand. Hotels, for example, find it difficult to meet any increase in demand if they don’t have the full staff to serve paying customers.

The gap between job vacancies and who holds those jobs has also prompted companies to raise wages and offer bonuses. These higher wages have raised concerns among analysts that wage inflation could add to already rising inflation and dampen the broader recovery.

“A lot of companies are coming out and we’re starting to see bearish forecasts,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “We are now seeing strategists kind of take their foot off the accelerator.”


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Alessandro Bazzoni examines opportunities for transformative growth in African economies http://avanceeconomico.com/alessandro-bazzoni-examines-opportunities-for-transformative-growth-in-african-economies/ Thu, 16 Sep 2021 17:57:51 +0000 http://avanceeconomico.com/alessandro-bazzoni-examines-opportunities-for-transformative-growth-in-african-economies/ Alexandre bazzoni The African continent is currently going through a phase of transformative growth in terms of economic development, with key sectors of the economy experiencing rapid improvement and acceleration. There are a number of opportunities that have come together to unlock this transformative growth, and these are all fueling the continent’s upward economic progress. […]]]>

Alexandre bazzoni

The African continent is currently going through a phase of transformative growth in terms of economic development, with key sectors of the economy experiencing rapid improvement and acceleration. There are a number of opportunities that have come together to unlock this transformative growth, and these are all fueling the continent’s upward economic progress. Having been recognized in many African countries for his charitable and philanthropic work, Alessandro Bazzoni has a vested interest in Africa’s potential for sustained economic growth. Here, he takes a closer look at these long-term trends.

A rapidly urbanizing and growing population

Currently, Africa has a population of around 1.2 billion, and this figure is expected to rise to around 1.7 billion over the next decade. Over 80% of this population growth will almost certainly take place in cities, making Africa the fastest urbanizing region of the world. In addition, Bazzoni points out that incomes are also increasing in much of Africa, which opens up new opportunities in the consumer market for companies. By 2030, Bazzoni predicts that African businesses and consumers will spend more than $ 6 trillion annually, an increase of $ 2 billion from 2015. This upward trend favors market growth in the sectors where the needs of the population are currently unmet, including beverages, food, financial services, education, health care and pharmaceuticals.

A continent in the process of industrialization

An industrial revolution is underway in Africa, with manufacturers increasing their production of a wide range of products. Bazzoni calculates that industries in Africa have the potential to double production over the next ten years with about 75% of that growth coming from manufacturing which will substitute for imports and help meet increased local demand. Export manufacturing is also likely to occur, and Bazzoni believes Africa will become the next global manufacturing hub to overtake China as a lower-cost region. Sectors such as agro-industry, tourism and ICT services will play a key role in this change.

Bridging the infrastructure gap

Bazzoni says poor infrastructure has long been a major obstacle to growth and investment in Africa. As a former senior executive within the sustainable energy industry, he is well placed to understand the impact that lack of access to the grid has on approximately 600 million Africans. However, thanks to investments and the sustainable energy revolution, progress is now being made and more entrepreneurs and investors are coming forward to address the infrastructure challenges facing the continent as a whole.

Innovations that free up the wealth of resources

It has been known for centuries that Africa is abundant in mineral and agricultural resources. However, until recently, the continent has struggled to transform these resources into long-term economic development and shared wealth. Now, however, new investments and innovations promise to change that image, creating exciting business opportunities for growth. Bazzoni’s area of ​​focus – sustainable energy – is a valuable and untapped resource in this region, with the potential to harness solar, hydro and wind power to help generate enough electricity for the needs of the population, lifting millions of Africans out of energy poverty. .

Increased access to mobile and digital services

It goes without saying that access to mobile and digital services is vital for a country to progress in today’s modern era. Until recently, the African continent was lagging behind in this regard. However, over the past decade, huge strides have been made, with sub-Saharan Africa experiencing a large number of broadband connections and a huge increase in mobile data traffic across the continent. Mobile money accounts are extremely prevalent in Africa, with over 120 million belonging to the population of the continent, which is equivalent to more than half of the global total. This has helped those who previously did not have access to traditional banks to move forward and forge ahead, with businesses benefiting from improved productivity, faster transactions, and access to broader global markets. It has been predicted that improving access to mobile and digital services will add up to $ 300 billion to Africa’s GDP over the next 5 years.

A final word from Bazzoni on Africa’s economic growth

Although the African continent still faces challenges when it comes to improving its economic growth, it is clear that African countries are seizing the above opportunities and taking advantage of them to propel their growth. As a younger and growing workforce improves rapidly, opportunities multiply for those who wish to invest and innovate in this region. By tapping into the region’s unused sustainable energy resources, Bazzoni believes that African countries can boost their economic growth faster and more efficiently, enabling them to become more productive, more efficient and, ultimately, more profitable over the years. next two decades.

This article Alessandro Bazzoni examines the opportunities for transformative growth in African economies that first appeared on BreezyScroll.

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Talent management and economic growth http://avanceeconomico.com/talent-management-and-economic-growth/ Wed, 15 Sep 2021 21:54:57 +0000 http://avanceeconomico.com/talent-management-and-economic-growth/ Our editorial team has just come across a fascinating short and educational book, titled: “Talent-Based Economy”, written by award-winning author and scholar, Mosi Dorbayani, who is an Executive Advisor and Economist at Orenda Enterprises Inc – Canada. To better understand and share more with our readers, we invited him to join us for an exclusive […]]]>

Our editorial team has just come across a fascinating short and educational book, titled: “Talent-Based Economy”, written by award-winning author and scholar, Mosi Dorbayani, who is an Executive Advisor and Economist at Orenda Enterprises Inc – Canada. To better understand and share more with our readers, we invited him to join us for an exclusive interview:

Why is talent management important?

Most economies tend to grow when they develop their populations in different ways that would maximize their productive potential. The level of skills and knowledge that people acquire in a community is often an indicator of economic growth or a predictor of future economic success.

Recently, there have been structural changes in the management of organizations – particularly in North America, which places considerable emphasis on talent development, talent retention and succession. This implies that talent is a precious resource, which plays a vital role in local and national economic growth.

In your new book, ‘Talent-Based Economy’, you mentioned that applying the right talent management strategy is a “competitive advantage”. Would you like to detail this?

Through talent-driven leadership, innovation and creativity can find their way to flourish. Usually, when individuals are trained, they acquire skills that allow them to perform tasks with less supervision; this, in turn, allows leaders to find the time to develop strategies for competitive advantage. And of course, strategizing for a competitive advantage requires an understanding of current economic trends and the influences these trends have on the job market.

In the same post, you focused on leadership succession strategies or plans. Why is it important for a business to look so far into the future?

As the world economy grows gradually, the working-age population tends to stagnate; this implies that there is a constant need for the development of talents to ensure the sustainability of companies and that the economy continues to grow steadily. As your entity ages, so do its team leaders and those in executive management. The need for leadership succession is predictable, and can be identified and addressed.

Organizations are living entities. Their workforce evolves, moves, ages and moves away. Thinking ahead and in the long term, it is essential to put in place a development program through which suitable candidates are given the opportunity to develop and be ready to advance to advanced and mature management positions.

While it is always possible to hire new external talent for managerial positions, developing them internally can be more beneficial for an organization – as it should provide long-term retention of staff, motivation for progress, room for improvement, positive competition, reduced turnover and of course, saving time and resources for long hiring processes, orientation and organizational cultural training of a new hire.

What do you think are the most problematic talent recruitment issues?

Unfortunately, we rely too much on software. Many of these HR software that initially screen candidates are biased and often inaccurate. As a result, many deserving talents may not get their foot in the door. Diversity, equality and inclusion are always part of the challenges. The other major problem is the lack of onboarding and rapid orientation programs on the first day of a new hire. Poor onboarding and quick referrals are actually building blocks and a barrier to employee engagement and retention. New recruits should be given general and specific guidance, but not rushed.

Companies often claim that their employees are their most important assets, yet they take shortcuts and it is usually development training programs that are omitted or cut in their budget, among other things. In the context of talent management, where should development training fit?

Talent management exists for companies to effectively meet their challenges, goals and business requirements. As market and business strategies are subject to “change”, it is crucial to establish a culture of learning in an ever-changing environment. If they are the most important assets, if employees are the key to the success of the organization, then investment in them is clearly critical and expected. In my opinion, the culture of continuous improvement (Kaizen) and lifelong learning should be diffused in every corner of an organization.

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PM revises economic growth to 5.9% this year, from 3.6% http://avanceeconomico.com/pm-revises-economic-growth-to-5-9-this-year-from-3-6/ Sat, 11 Sep 2021 18:17:11 +0000 http://avanceeconomico.com/pm-revises-economic-growth-to-5-9-this-year-from-3-6/ [Intime News] Greece’s economy is expected to grow 5.9% this year, faster than the 3.6% growth previously forecast, Prime Minister Kyriakos Mitsotakis said in his annual economic speech on Saturday. Greece emerged from a decade-long financial crisis in 2018, but saw its economy collapse again by 8.2% last year due to restrictions aimed at curbing […]]]>

[Intime News]

Greece’s economy is expected to grow 5.9% this year, faster than the 3.6% growth previously forecast, Prime Minister Kyriakos Mitsotakis said in his annual economic speech on Saturday.

Greece emerged from a decade-long financial crisis in 2018, but saw its economy collapse again by 8.2% last year due to restrictions aimed at curbing the spread of the COVID pandemic. 19.

“Today we are announcing the revision of the (growth) target for 2021 from 3.6% to 5.9%,” Mitsotakis said. “In an economy that will give opportunities to every citizen, without leaving anyone behind. “

As Mitsotakis spoke in Greece’s second-largest city of Thessaloniki, more than 15,000 people demonstrated there on issues ranging from economic policy to coronavirus vaccines. Short-lived clashes erupted between anti-vaccine protesters and police, who fired tear gas and water cannons to disperse the crowds.

The Greek economy grew by 3.4% in the second quarter of this year, beating forecasts and giving the government fiscal leeway to make tax relief measures.

Its annual expansion rate reached 16.2%, thanks to a pickup in consumer spending and investment.

Analysts attributed the second-quarter growth primarily to the lifting of lockdowns, pent-up demand and a boost from state support measures, and less to tourism, the impact of which is expected to show in the future. third trimester.

[Reuters]


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White House maintains economic growth projections despite Goldman Sachs downgrade http://avanceeconomico.com/white-house-maintains-economic-growth-projections-despite-goldman-sachs-downgrade/ Wed, 08 Sep 2021 19:41:00 +0000 http://avanceeconomico.com/white-house-maintains-economic-growth-projections-despite-goldman-sachs-downgrade/ The White House maintains that, despite a recently lowered projection from Goldman Sachs, economic growth under President Joe Biden will remain “the strongest we’ve seen in decades.” A reporter asked Brian Deese, director of the National Economic Council, about the screening at Wednesday’s press conference, wondering if the administration had “over-omitted” or if officials “were […]]]>

The White House maintains that, despite a recently lowered projection from Goldman Sachs, economic growth under President Joe Biden will remain “the strongest we’ve seen in decades.”

A reporter asked Brian Deese, director of the National Economic Council, about the screening at Wednesday’s press conference, wondering if the administration had “over-omitted” or if officials “were at all concerned that you piled up expectations too high at this point? “

“That’s a good question,” Deese conceded. “Even with a revised forecast, growth in 2021 would be the strongest we’ve seen in decades.”

BIDEN ADMINISTRATION UNVEILS ACTIONS TO REDUCE MEAT PRICE INCREASES AMID INFLATION CONCERNS

Biden’s chief economic adviser went on to praise “the record and historic strength of this recovery, not just historically, compared to other recoveries of crises and recessions in the United States, but a record on a global scale.”

“The United States is the only developed country where the GDP has already returned to its pre-pandemic level,” he continued. “This has not happened anywhere else in the world. The strength of our vision of economic growth and the growth of the labor market is sufficient that we can continue to experience strong growth, even as we face unforeseen circumstances, even as we work through the COVID delta challenges. “

“I think what is most remarkable about it is that even with these headwinds, we see the United States continuing to overtake our international peers and continue to surpass our historic progress for recoveries at similar points. “Deese said.

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Key words: News, Brian Deese, Goldman Sachs, White House, Economics, Joe Biden, Business

Original author: Christian Datoc

Original location: White House maintains economic growth projections despite Goldman Sachs downgrade


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Restore rigor to budgeting and growth plans http://avanceeconomico.com/restore-rigor-to-budgeting-and-growth-plans/ Wed, 01 Sep 2021 23:27:12 +0000 http://avanceeconomico.com/restore-rigor-to-budgeting-and-growth-plans/ Posted September 2, 2021 FOR the regime of Major General Muhammadu Buhari (retired), the promise of a qualitative change in budgeting remains illusory. A 2022 National Budget Snapshot contains no drastic and positive changes from years of shoddy budgeting, with excessive recurrent spending above capital, reliance on a tight income stream, deficits, and debt. Instead, […]]]>

FOR the regime of Major General Muhammadu Buhari (retired), the promise of a qualitative change in budgeting remains illusory. A 2022 National Budget Snapshot contains no drastic and positive changes from years of shoddy budgeting, with excessive recurrent spending above capital, reliance on a tight income stream, deficits, and debt. Instead, it offers more of the same poor planning that has characterized Nigeria’s budget management since 1999. There should be completely innovative ideas and new approaches to the budgeting process and budget implementation.

With four months to spare before the new fiscal year, the president and his team still have time to rework the plan into a plan that will cut borrowing, reduce the deficit, and devote more resources to infrastructure and social services.

Details of the 2022 budget proposals taken from a circular from Minister of Finance, Budget and National Planning, Zainab Ahmed, to federal ministries, departments and agencies reveal a projected budget size of 13.98 trillion naira. As a component of the Medium-Term Expenditure Framework and Budget Strategy Document 2022-24, and the National Medium-Term Development Plan 2021-25, its objectives include poverty reduction, “ensuring economic stability, and good governance ”.

But already, the achievement of these noble goals, as well as the achievement of food security, the reduction of unemployment and the control of inflation, have been compromised by the revenue deficits anticipated even before the take-off of the budget plan. As Ahmed admitted, “the provision for development spending has been constrained by low income, increased staff and pensions, as well as debt servicing costs.”

While national budgets everywhere else are designed to meet national development goals, budgeting in Nigeria has become repeatedly ridiculous. First, budgets tend to be late in the preparation and final adoption of the law. This is a trend that, of course, the Buhari regime, unlike its predecessors, has succeeded in moderating through early preparation.

Second, national budgets have been characterized by the double evil of deficits and debt. The total projected income of 8.76 trillion naira in 2022, for example, implies a deficit of 5.22 trillion naira. Debt service will drain 3.6 trillion naira, with an additional 292.7 billion naira in a sinking fund to repay maturing loans. The 2021 budget deficit of 13.08 trillion naira was 5.20 trillion naira and the debt service was 4.28 trillion naira. Under the MTEF / FSP 2020-24, the government has committed to borrow more than N15 trillion from domestic and external sources. Ahmed confirmed that nearly 91 percent of undistributed income in January-June this year was spent on debt service; 97% was spent in 2020, according to BudgIT, a tech-based advocacy group. It is not sustainable.

Budgets are also failing to meet the country’s chronic infrastructure deficit. Typically, less than 30 percent goes to capital spending while the bulk goes to current spending. The 3.61 billion naira allocated to capital in 2022 is only 26% of the total, while the recurring estimate of 6.21 billion naira represents 70.87% of the total expected income of 8.76 trillion naira. . At 4.79 trillion naira, personnel and pension costs will account for 57% of income, and are 534.4 billion naira higher than the 2021 figure.

Yet Nigeria has an infrastructure deficit of $ 3 trillion, six times the size of its GDP, according to Moody’s, a rating agency. Between 2009 and 2013, added Proshare, a Lagos-based consulting firm, the country invested just $ 664 per capita per year in infrastructure, compared to $ 3,060 in advanced economies. Asian economies average over 40 percent, the Asian Development Bank said. However, it is capital spending that drives economic growth in emerging economies, the World Economic Forum reported, adding: “Every dollar spent on an investment project generates an economic return of between 5.0% and 25%. . Nigeria continues to push millions of people into poverty by spending most of its resources on a few, serving an unnecessary and unproductive bureaucracy and politicians, and fueling a thriving machinery of corruption and tax evasion.

That’s not all. Budgeting here is not anchored to need; it is based on a primitive “envelope” system in which the estimates are simply added, kept or reduced compared to the headings and sub-headings of the previous year. It ignores needs, neglects critical areas, and facilitates massive looting by complicit bureaucrats, politicians and lawmakers. The repetitive budgeting of vehicles, office equipment and computers that fraudulently resurfaces in the budget every year should be done away with. Buhari is expected to recall the 2022 budget and rework it to be based on the ‘zero budget’ model which channels spending towards critical and current needs as the regime has promised since 2015 through the vice president Yemi Osinbajo.

In addition, budgets must correspond to national priorities. Infrastructure, social services and stimulation of productive economic sectors – agriculture, mining, manufacturing and services – are badly needed. More than 70 percent of the population is affected by poverty, 33.3 percent of the workforce is unemployed, oil and gas revenues dominate exports, tax revenues are meager and insecurity reigns. Health, education and water supply are grossly underfunded, and facilities dilapidated and inadequate.

Money should be spent on these issues. Bloated bureaucracy and huge resources spent on political office holders, inefficient state-owned enterprises and religious activities are not sustainable. Budgeting must be precise, an accounting document must not have room for such vague headings as “department-wide” votes that set aside up to 500 billion naira in some years, allowing the executive to spend taxpayers’ money in a capricious way and with little oversight.

The completion of heinous budgeting was the frivolous falsification of estimates by federal lawmakers who add, subtract, and distort spending plans to accommodate private interests and their controversial “constituency plans.”

There should be a radical change in attitude towards budgeting to break the cycle of underdevelopment and poverty. Ideally, budgets are designed to respond to national economic, social and political policies. These include achieving inclusive growth, economic stability and growth, and reallocation of resources. A joint study by PwC and Oxford Economics attributed the rapid economic growth in China, India and other emerging Asian economies to effective budgeting and implementation. Buhari is expected to follow suit, recall and restructure the 2022 budget plan to mark a radical break with the messy past.

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Opinion: What the growth and value stocks debate reveals about the future of the bull market http://avanceeconomico.com/opinion-what-the-growth-and-value-stocks-debate-reveals-about-the-future-of-the-bull-market/ Sat, 28 Aug 2021 16:49:00 +0000 http://avanceeconomico.com/opinion-what-the-growth-and-value-stocks-debate-reveals-about-the-future-of-the-bull-market/ Does the resurgence of value stocks versus growth stocks mean that the days of the bull market are numbered? I’m referring to the epic battle between two major stock styles: growth stocks (those of the fastest growing companies that trade for higher valuations) and value stocks (the companies that don’t have the favor that trade […]]]>

Does the resurgence of value stocks versus growth stocks mean that the days of the bull market are numbered?

I’m referring to the epic battle between two major stock styles: growth stocks (those of the fastest growing companies that trade for higher valuations) and value stocks (the companies that don’t have the favor that trade for lower valuations).

While mid-value stocks over the past century have drastically beaten growth, they have undergone significant periods in which growth has taken over. The last decade has been one of those times.

The tide began to turn in the fall of 2020 in favor of value, causing widespread celebration among value managers that maybe – just maybe – their long period of suffering was coming to an end. Most of the other managers looked on with puzzled attachment, seeing the growth versus value debate as little more than intramural rivalry.

Some observers think this attitude is shortsighted. They believe that the fortunes of growth stocks versus value stocks can tell us whether or not we are in a healthy bull market.

At first glance, their argument makes sense. Growth stocks are likely to experience the fastest growth when the economy is in full swing. And economic growth is certainly conducive to a bull market on Wall Street. So it stands to reason that a leadership shift towards value from growth could mean an impending market downturn.

This theoretical argument is consistent with the stock market experience before and after the dot-com bubble burst in 2000. The bull market years of the 1990s were one of the longest periods of the last century when stocks grew. have exceeded the value. After the bubble burst, value stocks entered one of the longest stretches of the last century when they outpaced growth.

There are exceptions in the historical record. During the Great Financial Crisis, for example, growth stocks generally outperformed value. Yet the economy contracted considerably and the stock market collapsed.

What the data tells us

To better understand this confused relationship between market health and the relative returns of growth and value stocks, I analyzed stock market trends up to mid-1926, using data from Dartmouth professor Ken French and by Yale University professor Robert Shiller. For each month, I got data on the value’s performance versus growth, as well as the SPX of the S&P 500,
+ 0.88%
performance adjusted for inflation and dividends.

I looked for correlations between the two and came back empty. There have been times when the relative strength of value was associated with lower stock returns, and others where it was correlated with higher returns. There was no consistent model.

This is illustrated in the graphic above. It divides the data into two groups of equal size – the first covering the period 1926-1973 and the second covering the period 1974 to present. In the first half of the sample, the stock market performed best when growth beat value. It was just the other way around in the second half of the sample.

My hunch as to why there is an inconsistent correlation between the market and the relative strength of value versus growth: There is more than one reason why growth can slip behind value. The strength of the economy is only one reason. Another, which has become particularly relevant in recent decades, is a bubble in the valuation of growth stocks. If such a bubble deflates, growth stocks can lag seriously behind value stocks, even as the overall economy continues to grow.

We saw part of this during the dot-com bubble deflation between March 2000 and October 2002. Although this bear market lasted two and a half years, the associated recession only lasted eight months (from March to November 2001, according to the National Bureau of Economic Research, the semi-official arbiter of the onset and end of recessions). By the end of this bear market, US gross domestic product (GDP) was 10% above its initial level. Still, the S&P 500 was down 49.1%. Much of this difference can be attributed to the return to earth of growth stock valuations.

Value stocks have done quite well during this bear market, in relative terms. Additionally, according to French data, mid to small cap stocks actually gained money during this bear market.

The bottom line? Relax. While a lot depends on whether the value style has entered a period of several years of superior growth, the fate of the bull market is not one of them.

Mark Hulbert is a regular contributor to MarketWatch. Its Hulbert Ratings tracks investment bulletins that pay a fixed fee to be audited. He can be contacted at mark@hulbertratings.com

Following: Why equity market bulls may be right to push valuations so high

More: Not all actions are in a bubble. Here’s how to find today’s bargains and tomorrow’s winners


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