Monday, May 31, 2010

>Is this the ‘BRICs Decade’?

The last decade saw the BRICs make their mark on the global economic landscape. Over the past 10 years they have contributed over a third of world GDP growth and grown from one-sixth of the world economy to almost a quarter (in PPP terms). Looking forward to the coming decade, we expect this trend to continue and become even more pronounced.

The last decade saw the ‘arrival’ of the BRICs story. Here, we take a look at the next chapter—at how the BRICs and their relationships with the rest of the world will change in their second decade. We expect many of the trends we have already seen to continue and become even more pronounced. Our baseline projections envisage the BRICs, as an aggregate, overtaking the US by 2018. In terms of size, Brazil’s economy will be larger than Italy’s by 2020; India and Russia will individually be larger than Spain, Canada or Italy.

In the coming decade, the more striking story will be the rise of the new BRICs middle class.
In the last decade alone, the number of people with incomes greater than $6,000 and less than
$30,000 has grown by hundreds of millions, and this number is set to rise even further in the next 10 years. These trends imply an acceleration in demand potential that will affect the types of products the BRICs import—the import share of low value added goods is likely to fall and imports of high value added goods, such as cars, office equipment and technology, will rise.

In the past decade, BRIC equity markets outperformed significantly because the strong growth of these economies surprised many and the BRICs themselves came into focus. At the same time, valuations were low relative to many major markets in 2000. Now that the BRICs story is better known, expectations are higher and the valuation gap is much smaller, the same degree of outperformance seems much less likely, even if the BRICs deliver solid returns.

To read the full report: BRIC'S DECADE


Anonymous said...

You have forgotten to add South Africa, which has voiced its interest in joining BRIC; and, also, Indonesia, which has not yet asked for BRIC membership but which is growing furiously.
Secondly, PPP as a yardstick is good to beat the rich countries with since it shows better cost of living than they have. But the true way to capture reality is through the good old GDP way, especially in a country like India where 90% of the wealth is in 10% of the hands. This way we can ask for more social reforms rather than
programmes for the concentration of wealth -- apart from bad morals, it would also be bad economics in the long run. Cheers!

Rish said...

Yes ,Indonesia indeed is growing at a fast pace but natural calamities put pressure on that countries economy,Be it A tsunami ,Earthquake or even volcanoes .

Anonymous said...

Rish Bhai! What about Dantewada, Mangalore and West Bengal train sabotage -- all within how many days?

Rish said...

Yea Terrorism is one big vampire,Money sucking black hole ,I think if i am correct a whooping 70% of budget allocation goes for armed forces ,Which is a challenging task for our government to generate that much revenue.

Unknown said...

wealth distribution in India is skewed 90:10 but it is still better than US and China by most(not all) metrics. In US it is 90:2. Check out the gini coefficient of India and China. For China it is already close to levels where it predicts an uprising or social unrest.

The only place where India's richest of the rich shine is Swiss banks! According to some estimates, Indians are the largest depositors and have close to $1.5 trillion. I would guess it is black money of the rulers of this country who were involved with arms deals, railways, ghas chara