Acorn Macro Consulting reports that the BRICS, grouped as an alternative to the G7, is the world’s largest bloc in terms of gross domestic product (GDP), accounting for purchasing power parity The report says that China’s growth has helped the G7 to grow by 30 percent. With China’s growth, this group accounts for 31.5% of GDP compared to 30.7% for the G7.
BRICS countries shift the size of their economies
The BRICS, consisting of Brazil, Russia, India, China, and South Africa, has leapfrogged the G7 to become the world’s largest GDP bloc. According to dataprovided by Acorn Macro Consulting, a U.K.-based macroeconomic research firm, the BRICS bloc’s contribution to global GDP was 31.5%, surpassing that of the G7 (which currently contributes only 30.7%).
The graph provided by Richard Diaz, a consultant with Acorn, shows that the BRICS are growing constantly compared to the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the European Union) and further predicts that the difference will increase in the coming years The report also predicts that the gap will increase in the coming years.
A major boost to the BRICS bloc has been the growth of the Chinese economy, which in 2014outpaced U.S. GDPmeasured in terms of purchasing power parity (PPP). The International Monetary Fund (IMF)estimatesthat China’s economy grew more than the U.S. in 2014. China ranks first in the world with a GDP PPP of $30 trillion, while the U.S. ranks second with $25 trillion.
Further growth is expected
The gap in economic influence between these groups and the BRICS could continue to widen in the short term, as more countries seek to join the alternative groupings; in February, Anil Sukral, South Africa’s ambassador to the BRICS,said, “Member countries have already made recommendations for accepting new members and criteria for the acceptance of new members, and this year will be crucial for the expansion of the bloc.”
Important economies have already applied for membership, including Saudi Arabia, Egypt, and Bangladesh, which have acquired shares in the New Development Bank, the BRICS funding agency. Countries such as Iran, Algeria, Argentina, and Turkey have also expressed interest in joining the bloc.
Although still only a project, in July 2022 the BRICS countries proposed the idea of issuing their own currency to weaken the dominance of the US dollar in international payments. Recently, Chinese President Xi and Russian President Vladimir Putin have decided to push for the Chinese yuan as a settlement currency between Russia and the emerging economies of Latam, Asia, and Africa.
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