 |
| The expanded BRICS economic grouping will include some of the world's largest oil exporters. (Source: China Daily) |
According to the news, the proportion of BRICS in the world's Gross Domestic Product (GDP) calculated by purchasing power parity (PPP) will far exceed that of the Group of Seven (G7).
BRICS currently comprises Brazil, Russia, India, China and South Africa. The group will be joined by Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE) in January 2024.
G7 includes 7 developed industrial countries: USA, Canada, UK, France, Italy, Germany and Japan.
Bloomberg points out that, when expanded, BRICS will be larger than the G7. By 2022, the bloc will account for 36% of the global economy, compared to 30% for the G7.
“Our forecasts show that an expanding workforce and room for technological catch-up will lift BRICS+’s share to 45% by 2040, compared with 21% for G7 economies,” the agency wrote.
In effect, BRICS+ and the G7 will swap places in size between 2001 and 2040."
The expanded BRICS would include some of the world's largest oil exporters such as Saudi Arabia, Russia, the UAE and Iran, as well as some of the largest oil importers such as China and India.
If the group succeeds in shifting some oil trade into other currencies, it could have a knock-on effect on the dollar's share of international trade and global foreign exchange reserves.
BRICS members have been actively working to abandon the greenback in trade.
In addition, Bloomberg also pointed out some of the challenges facing the bloc, including China's economic slowdown, the inability to exit the Petrodollar system (using USD to pay oil exporting countries) in the near future, as well as the reluctance to promote a single alternative solution.
Bloomberg concludes: "BRICS will change the world, but perhaps more through their growing share of GDP and diverse economic and political systems than through the realization of the grand plans of policymakers."
Source
Comment (0)