The BRIC Report

SPJIMR
Dr. Pallavi Mody
E-mail:pallavimody@spjimr.org
 A snapshot of top economies
Gross National Income Gross National Income
Population (Exchange Rate) (PPP)
Avg. Annual Avg. Annual Per
Gr. 2000-08 $ Billion Gr. 2000- Capita Country
Country Million 2009 (%) 2009 08 (%) Income $ Billion 2008 Rank
World 6,697   57,937     69808  
US 310 0.9 14,256 2.5 46,857 14,256 1
Japan 127 0.1 5,068 1.6 39,731 4,159 3
China 1,339 0.6 4,908 10.4 3,678 8,765 2
Germany 81 0 3,352 1.2 40,875 2,806 5
UK 62 0.5 2,138 2.5 35,334 2,139 6
France 65 0.7 2,675 1.7 42,747 2,108 9
Italy 60 0.6 2,118 0.9 35,435 1,740 10
Brazil 193 1.2 1,574 3.6 8,220 2,013 7
Spain 46 1.5 1,464 3.3 31,946 1,360 11
Canada 34 1 1,336 2.5 39,669 1,281 12

India 1,187 1.4 1,235 7.9 1,031 3,526 4

Russian
Fed 141 -0.4 1,229 6.8 8,694 2,109 8
Source: World Development Report 2010
IMF: GNI figures for 2009
 Some fundamental shift or
structural change?
The BRIC Report
“Dreaming With BRICs: The Path to 2050”,
Goldman Sach released Paper No. 99
on Global Economics by
Dominic Wilson and Roopa Purshothaman
1st October 2003.
The list of the world’s ten largest economies
may look quite different in 2050

• Over the next 50 years, Brazil, Russia, India and China—the

BRICs economies—could become a much larger force in the
world economy.

• If things go right, in less than 40 years, the BRICs economies

together could be larger than the G6 (US, Japan, Germany,
France, UK and Italy) in US dollar terms. By 2025 they could
account for over half the size of the G6. Currently, they are worth
less than 15%.

• About two-thirds of the increase in US dollar GDP from the BRICs

should come from higher real growth, with the balance through
currency appreciation.
The list of the world’s ten largest economies
by GDP in 2050

2005 2050
Year 2000 2015 2025 2040 2050
PCI

Brazil 762 468 952 1,695 3,740 6,074 26,592

Russia 391 634 1,232 2,264 4,467 5,870 49,646

India 469 604 1,411 3,174 12,367 27,803 17,366

China 1,078 1,724 4,754 10,213 26,439 44,453 31,357

USA 9,825 11,697 14,786 18,340 27,229 35,165 83,710

Japan 4,176 4,427 4,858 5,567 6,039 6,673 66,805

Germany 1,875 2,011 2,386 2,604 3,147 3,603 48,952

UK 1,437 1,688 2,089 2,456 3,201 3,782 59,122

France 1,311 1,489 1,767 2,095 2,668 3,148 51,594

Italy 1,078 1,236 1,447 1,625 1,788 2,061 40,901

 BRIC II-Oct 2004

The new report takes the analysis one

step forward and focuses on the impact
the growth of these four economies will
have on global markets

Global commodities market (oil)

Consumer goods (automobile)
Global capital markets
 Global growth to rise to 4%
• Weight of BRIC in the world economy will rise from 10
per cent today to 20 per cent within 20 years.

• The number of people with an income over $3,000

should double in 3 years and within a decade over 800
million people will have crossed this threshold.

• China and India will emerge as the world's largest car

markets over time.

• The report makes the point that the emergence of the

BRIC economies has already had an impact on global
commodity markets.
Markets in India and China to
expand exponentially
• With rising incomes in
emerging economies, their
middle classes are
expanding fast, creating a
vast new market.
• Markets for passenger cars
are expected to jump from
1.5 mn in 2007 to 3.3 mn
(NCAER) in 2010.
• Goldman Sach predicts
phenomenal increase in
car ownership.
BRIC impact on capital markets
• The share of BRIC in global capital markets
could rise from current 3.5%-15% by 2020 to
resemble the markets of Europe.

• In the world of low nominal returns from the

capital markets of the advanced economies, a
large percentage of the incremental wealth
created globally will occur in the stock markets
of the developing world.
 BRIC Update 2007
• Growth acceleration in India since 2003 represents a
structural increase rather than a cyclical upturn.
• Half of the current growth is driven by productivity growth
which would help India sustain 8% growth until 2020.
• India will become the 2nd largest economy just behind
China, ahead of US in 2050.
• From 2007 to 2020, India’s GDP per capita in US Dollar
terms will quadruple
• Indians will also consume about five times more cars
and three times more crude oil
 Next 11, beyond BRICS
Global Economics Paper No. 153, Goldman
Sachs lists next interesting countries. They
include

Bangladesh, Egypt, Indonesia, Iran, Korea,

Mexico, Nigeria, Pakistan, Philippines, Turkey and

Vietnam.