Universidad San Francisco de Quito

Nicholas Thigpen
24/09/19
International Business

BRICS and its economic impact in the future

Goldman Sachs predicts that by 2050, the top five economies would be composed of the
BRIC countries (China, India, Brazil, Russia), and the United States. Increased
globalization has meant that BRICS has become an important source of global growth
and political influence. BRICS economies have grown rapidly with their share of global
GDP rising from 11% in 1990 to almost 30% in 2014. In less than 40 years, the BRICs’
economies together could be larger than the G6 in US dollar terms.

Moreover, projections shows that over the next 50 years, Brazil’s GDP growth rate
averages 3.6%. The size of Brazil’s economy overtakes Italy by 2025; France by 2031;
UK and Germany by 2036. China’s GDP growth rate falls to 5% in 2020 from its 8.1%
growth rate projected for 2003. By the mid-2040s, growth slows to around 3.5%. Even
so, high investment rates, a large labor force and steady convergence would mean China
becomes the world’s largest economy by 2041. In addition, India’s growth rate remains
above 5% throughout the period. India’s GDP will be greater than Japan by 2032.

If the BRICs do come anywhere close to meeting the projections set out by Goldman
Sachs, the implications for the pattern of growth and the role of BRICS in the future of
economy will be substantial.

Furthermore, BRICS consumers are beginning to rival their American counterparts in

terms of total purchasing power. Now more cars, cell phones, televisions, refrigerators,
and cognac are now sold in China alone than in the United States. Even with slower
growth, the economic engine of the BRICS should be more important than that of the
United States or the European Union for most of the 21st century.
 Indeed, these forecasts and data made by both papers show very positive figures for
BRICS that will promise a dominance on the world economic environment. However,
we have to be aware that there's no guarantee that the BRICS can maintain their big
growth rates. Just as their expanding economies took the world by surprise over the past
decade, the big shock for the next decade may be that they will grow less quickly than
assumed. Still, it would be wrong to say that this block is not of the utmost importance
for the future of the world economy, though, its projections shows that BRICS will
approach the total size of the seven largest developed economies by 2030.

Today we are experiencing a trade war between two world powers, one of them
belonging to BRICS (China) and will have a big impact in the future of international
trade and economic growth for the BRICS countries. Yet, it is impossible to deny the
strength of these countries and the leading role that will take on the future that back up
the aforementioned data, being crucial partners of developing countries and other big
economic powers around the world.

Source

Van Agtmael, A. (2012). Think Again: The Brics. Retrieved from

search.ebscohost.com/login.aspx? direct=true&db=a9h&AN=82355898&site=ehost-
live
Wilson, D., & Purushothaman, R. (2003). Dreaming with BRICs: the path to 2050.
London: Goldman, Sachs & Co.