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Dissolving “B.R.I.C” Remaining Only “I”

Dissolving “B.R.I.C” Remaining Only “I”

April 11, 2016 By admin

BY RSH Inc IN RSHinc On 11-04-2016

Brazil, Russia, India, And China, “B.R.I.C” an acronym coined in 2001 by Jim O’Neill from investment bank Goldman Sachs in a paper entitled “Building Better Global Economic BRICs” Since then the acronym has come into widespread use as a symbol of the apparent shift in global economic power away from the developed economies towards the developing world.
It can be said though that only the “I”, India remains as the others listed have shown major slows in growth recently with many expecting this slow to continue well until 2020 due to various circumstances.
“B” Brazil, the seventh-largest economy recently entered a recession due to low commodity prices of which they’re economy is heavily based off of agricultural and mineral exports, with items like Soy representing 40% of their total exports, this combined with slow global growth and higher interest rates(14.25% as of early 2016) has pushed down, and as shown below will continue to push down their household expenditures, and construction output, bringing their once thriving GDP growth to a stop.

“R” Russia, a largely oil based economy has suffered greatly in the last few years as shown below, and is expected to continue to suffer based on oil prices, high governmental and military costs, and global sanctions. Oil taxes accounted for over 50% of Russia’s income in 2015, with lowering oil prices a higher oil tax will need to be imposed causing a further slow on their GDP as shown, with only an estimated 1.5% growth in 2020. Note: Russia’s Inflationary Rate Is 16% as of 2015.

“I” India, the third largest economy, and the fastest growing major economy in the world has consistently presented high GDP growth numbers, and by all forecasts is expected to continue to present these high numbers. While other countries and GDPs have been effected by slowing global economies, low commodity prices, etc. India has maintained it’s global position and continued to not only grow, but prosper in these times due to not being bound to commodity prices and high governmental costs as most others. Initial expectations as shown below demonstrate a steady increase in GDP. Note: India’s inflation rate is 5.38% as of 2015.

“C” China, the second large economy, though presenting incredibly high numbers, it is believed in fact they are slowing down, and will continue to slow down. China as of late 2015, early 2016 entered a full recession. China’s stock market has plunged over 20% since December alone, and China has required considerable government stimulus totally nearly half a trillion dollars in order to keep the stock market, and most major businesses afloat. Beyond this, sales such as autosales have fallen significantly with a decrease of nearly 7% in July, 2015 alone. China’s reported numbers such as it’s inflationary rate of 4%, and GDP growth of 6% are hard to verify, but when inflation is calculated using Rice over the last 2 years, which grew from 5.76/kg to ~6.65/kg as of 2016 representing a change of 15.6%, the actual calculated inflation rate is that of about 7.8% yearly.

 

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