Photo of BRICS leaders courtesy of Wikipedia under Creative Commons Attribution 2.0 Generic license.
According to a new report from Acorn Macro Consulting, the BRICS group, made up of the world’s five largest developing economies, has now surpassed the Group of Seven (G7), by comprising a bigger share of the world’s gross domestic product (GDP), based on purchasing power parity.
According to the research by the UK-based macroeconomic research firm, the combined BRICS nations, Brazil, Russia, India, China, and South Africa, are responsible for generating 31.5% of the world’s GDP. At the same time, the G7 nations, made up of the US, Canada, France, Germany, Italy, Japan, and the UK, considered the most advanced economic nations, only were responsible for generating 30.7% of the of the global GDP.
Analysts say they expect the gap between the two groups to continue to grow, given the robust growth of both China and India’s economies, and the fact that there are more countries looking to join the BRICS alliance.
Russian Foreign Minister Sergey Lavrov said earlier this year that there are presently “more than a dozen” nations which have expressed an interest in joining the BRICS alliance, among which are Algeria, Argentina, Bahrain, Bangladesh, Indonesia, Iran, Egypt, Mexico, Nigeria, Pakistan, Sudan, Syria, Türkiye, the United Arab Emirates and Venezuela. At the same time, Saudi Arabia, Egypt and Bangladesh have acquired equity in BRICS’ funding organization, the New Development Bank.
BRICS nations had proposed last year creating their own currency, so as to allow them to move away from the dollar and the euro when settling trade obligations in mutual transactions.
The drive toward de-dollarization was heightened by the difficulties Russia has endured performing settlements in those currencies following the imposition of economic sanctions in response to the war in Ukraine. More recently, Russian President Vladimir Putin has suggested moving toward BRICS allies and other international partners in Asia, Africa, and Latin America settling trade obligations in Chinese yuan, further accelerating the bloc’s de-dollarization.
