The document summarizes the economic conditions of the BRICS countries (Brazil, Russia, India, China) in 2013. Brazil struggled with high inflation and interest rates while its currency lost value. India faced issues with corruption, inflation, and a growing deficit while its currency also weakened. Russia had to raise interest rates to combat high inflation as its growth forecasts were cut and currency fell. China began economic reforms and is expected to have growth of 7.4% while its housing market remained strong.
The document summarizes the economic conditions of the BRICS countries (Brazil, Russia, India, China) in 2013. Brazil struggled with high inflation and interest rates while its currency lost value. India faced issues with corruption, inflation, and a growing deficit while its currency also weakened. Russia had to raise interest rates to combat high inflation as its growth forecasts were cut and currency fell. China began economic reforms and is expected to have growth of 7.4% while its housing market remained strong.
The document summarizes the economic conditions of the BRICS countries (Brazil, Russia, India, China) in 2013. Brazil struggled with high inflation and interest rates while its currency lost value. India faced issues with corruption, inflation, and a growing deficit while its currency also weakened. Russia had to raise interest rates to combat high inflation as its growth forecasts were cut and currency fell. China began economic reforms and is expected to have growth of 7.4% while its housing market remained strong.
STACK UP By Christopher Dean Illustrations by Liane Yue
WHAT ARE THE BRICS?
Brazil, Russia, India and China are known collectively as BRIC. The acronym was developed by British economist Jim ONeill in an influential 2001 paper. These countries have in common rapidly growing
economies that appear to suggest a shift in global
power towards the developing world.
Brazil
This past year has been quite the rollercoaster
ride for Brazils economy.
Brazil has managed to eke out 1.5% growth from
Q1 to Q2, while the IMF has decreased Brazils expected annual growth rate for 2014 from 3.2% to 2.5%. In 2013, the Brazilian Real has lost approximately 20% of its value over the year. The Brazilian Central Bank has been forced to raise benchmark interest rates to a whopping 9.5% to combat inflation and a weakening currency.
India
India faces a triple threat of corruption, inflation,
and a growing current account deficit.
The rupee has seen record volatility in 2013, as
it weakened more than 10% YTD, pushing up import costs for much of India. To combat the its slide and inflation, Indias Central Bank has been forced to raise benchmark interest rates to 7.5% and possibly further. Growth has slowed to 4.9% in 2013, well below the 10-year average of 7.9%.
Russia
Russia has been dealing with serious financial
challenges in the last few months.
This has been reflected by IMFs cutting of growth
expectations down to 1.5% from 3.7%. Inflation has forced the Russian Central bank to increase benchmark interest rates up to 5.5%, strangling growth in Russias economy. Its currency, the Ruble, has weakened 8% this year as of August, as investors continue to withdraw money from emerging markets on taper fears.
China
China began an unprecedented but promising
program of reforms for its economy in 2013.
There have been moves to shore up its banking
system, a push to slow increases in housing prices, and efforts to eradicate corruption among party officials. The GDP is expected to grow at a comfortable rate of 7.4%, according to a recent Reuters poll. Chinese housing continues to provide strong returns, even in the face of rising prices.