BRICS Countries Have Experienced Increasing Distance from G7 Nations
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The global economic landscape is undergoing a significant shift, as the combined might of the BRICS and G7 nations plays out on the world stage. Recent data from the International Monetary Fund reveals that the gap between the two economic powerhouses has grown, with BRICS accounting for a staggering 36.8% of the global GDP in 2021, compared to the G7's 28.86%.
This 8% disparity marks a sharp increase from the 6.9% discrepancy seen the year prior. The G7, comprised of the United States, Britain, France, Germany, Italy, Japan, and Canada, has been surpassed by the BRICS coalition of Brazil, Russia, India, China, and South Africa, along with Egypt, Indonesia, Iran, Ethiopia, and the United Arab Emirates.
The growth trajectory of BRICS countries is particularly noteworthy. In terms of purchasing power parity, these nations are poised to make up an astounding 39.31% of the global GDP by 2024, leaving the G7's 28.65% share in the dust. The BRICS countries also boast a combined population of 46% and control over 25% of the world's landmass, making them key players in both consumption and resource markets.
By contrast, the G7 continues to dominate in nominal terms, with a current GDP share of 44.5%. However, theirdemographic influence is waning, as they hold just under 10% of the global population.
One notable advantage of the BRICS countries lies in their international payment system, BRICS Pay, which, according to experts, offers numerous benefits over existing systems. This system is open to citizens of any country in the world, setting it apart from conventional global payment networks.
Furthermore, the Eurasian Economic Union (EAEU) has seen an impressive 91% of settlements made in national currencies.
In the years to come, the BRICS countries are projected to see strong growth, averaging 3.8% annually over the next five years. By 2040, they could account for as much as 30% of the global GDP, both in nominal and PPP terms. This growth is expected to be driven by youthful demographics and the wealth of resources within the coalition.
While the G7 and EU are projected to grow at a more modest 1.74% annually, they face challenges posed by aging populations and slowing productivity.
Beyond economic numbers, there are other structural shifts underway. The BRICS countries are increasingly promoting trade in local currencies, such as the renminbi, and focusing on emerging technologies like AI governance and digital payment systems. The G7, on the other hand, faces challenges with aging infrastructure.
In essence, the growing disparity between the BRICS and G7 reflects the consolidation of BRICS as a multipolar force challenging the Western-led order, particularly in terms of development financing and purchasing power parity. While the G7 retains its nominal wealth, it faces structural headwinds in the years to come.
- The BRICS and G7 nations are significantly impacting the global economic landscape, with the BRICS accounting for 36.8% of the global GDP in 2021 compared to the G7's 28.86%.
- The growth trajectory of the BRICS countries is particularly noteworthy, with them projected to make up an astounding 39.31% of the global GDP by 2024.
- One advantage of the BRICS countries is their international payment system, BRICS Pay, which offers numerous benefits over existing systems and is open to citizens of any country in the world.
- The BRICS countries are projected to see strong growth, averaging 3.8% annually over the next five years, while the G7 and EU are projected to grow at a more modest 1.74% annually.
- Beyond economic numbers, the BRICS countries are increasingly promoting trade in local currencies and focusing on emerging technologies like AI governance and digital payment systems, while the G7 faces challenges with aging infrastructure.
