BRICS countries are expected to eventually surpass the G7 countries.
BRICS dominance reached nearly 35% in five years.
This year has seen a lot of headlines regarding the rising economic dominance of the BRICS bloc of countries. According to a recent Bloomberg report, the BRICS countries are expected to grow their economies faster than the G7 nations.
The collective country will grow economically to shift the global power balance even more in the coming years. The IMF predicts that the collective will increase to almost 35% by 2028, with China serving as the main driver of global growth during that time.
Also, the growing use of cryptocurrencies, the BRICS nations’ efforts to de-dollarize their economies, and China’s growing “economic might” have all been identified by the global head of country risk at Fitch Solutions as significant factors that will eventually undermine the dominance of the U.S. dollar. The BRICS bloc has not yet started taking concrete action, though.
BRICS Challenges
The economic crisis and dollar dominance in the economic era has increased. It was felt that alternative mechanisms of cooperation around trade and investment were necessary, and as a result, BRICS groups began to form.
Brazil, Russia, India, China, and South Africa make up the BRICS group. Additionally, they already have a higher GDP (PPP) than the G7 countries. The United States, the United Kingdom, France, Canada, Germany, Italy, and Japan are included in this group.
However, over the last three years, the BRICS bloc has faced many challenges. In 2023, Russia was engaged in a protracted conflict with Ukraine. China was dealing with the fallout from a strict “zero-covid” policy. Among other problems, Brazil’s economy shrank in 2022, and South Africa’s Gross Domestic Product (GDP) fell by 1.35 between October and December of last year. And India’s growth is forecast to slow to 6.1% in 2023 before increasing to 6.8% in 2024.