I was caught by the recent FT article chronicling a report from Goldman Sachs that concluded “that the global economy will expand at a faster rate this decade than in any of the previous three.” What powers this enhanced growth, according to Goldman Sachs and its celebrity economist, Jim O’Neill, are the original BRICs – excluding therefore South Africa.
With the economic growth of the BRICS in mind I decided to look a bit more closely at the economic growth. My inquiry produced the table below on economic growth.
Economic Growth for the BRICS
|Country||Current Estimate 2013||Recent – 2012||Previous -2011|
|China||7.5% (Premier Wen)||7.8%||8.0 -9.2%|
|India||6.1% to 6.7% (Finance)||5%||6.5%|
|Russia||3.3% (World Bank)||3.4% (Federal Statistics)||4.3%|
|South Africa||2.6% (Reserve Bank)||2.5%||3.5%|
A couple things are apparent. First of course O’Neill would strongly object to an examination of what I call the “Political BRICS”. The Political BRICS is the global summit leadership that has met annually now from 2009 – though ministers met before that. For O’Neill, and publicly stated, he argued that South Africa should not be included in his conception of the BRICS. All of his original members rank within the top ten of GDP growth. South Africa in contrast is ranked only 26th (all this according to the CIA’s World Facts Handbook).
It is also apparent from this cursory examination that China still stands out from the rest for rapid growth – well beyond any of the other BRICS.
And finally it would appear that current estimates of economic growth are decidedly moderated from recent years. Moreover, if you follow the estimations of economic growth mixed signals appear to be the ‘order of the day’. India is struggling with inflation; Brazil has generally healthy growth, but not any way the “China growth rates” at least in recent years. And of course South African growth has been sputtering along and there are estimates that South Africa will lose its place as the largest African economy to Nigeria.
Now I suppose it is all relative. The article I alluded to was written in part to raise concerns over European growth and in particular Eurozone growth. In that light the projected growth from the BRICS looks solid in comparison to the Eurozone. But still it does seem to me that the economic growth – with the exception of China – seems rather modest. And there is a constant mixed bag of reporting that raises the capacity of China to continue to grow at an above 7 percent rate.
Am I wrong?