The interests of the BRICS countries are likely to become increasingly divergent due to the disparity in the rates of economic growth in the bloc’s countries, points out economist Sergei Ermolaev of the Chair of Economic Theory at Russia’s Plekhanov University of Economics.
This week, Standard and Poor’s (S&P), a rating agency, published a report in which it argued that it no longer makes sense to group BRICS countries into one unified group. For the agency, the disparities in growth rates in Brazil, Russia, India, China and South Africa are very significant.
“Unfortunately for us, in this case we must agree with S&P. Let us remember that the term ‘BRIC’ was coined for the first time in 2001. South Africa was later included in the bloc. At that time, Brazil, Russia, India and China, as a group of the world’s largest emerging economies, had very, very good prospects for economic growth,” said the economist.
Ermolaev also recalled that Brazil’s average growth in the period from 2001 to 2010 was 3.7%. Russia’s average was 4.8%, while India’s totaled 7.5% and China’s 10.5%.
“Note that already in that decade [2001-2010] the pace of growth of the BRICS countries was already quite fast,” said the economist, adding that this inequality remained in the period from 2011 to 2019.
According to the latest IMF forecast, the economies of China and India are expected to grow by 6.1% in 2019, while the Russian economy is expected to grow by 1.1%. Brazil’s economy, on the other hand, is expected to narrowly escape the recession, with growth of 0.9%, as well as South Africa with 0.7%.
The IMF’s forecast for world average growth published in August 2019 points to slower growth in the world economy next year.
The IMF predicts that by 2020 India’s economy will grow by 7%, higher than China’s estimated growth of 5.8%. The other countries in the group, Russia, Brazil and South Africa, should face much lower growth: 1.9%, 2% and 1.1%, respectively.
“In a long-term perspective, India and China must significantly outperform the other members of the group in terms of economic growth. Therefore, it is inevitable that the interests of the BRICS countries will gradually shift away,” claimed the economist.