Brazil joins fellow-BRIC China in world’s Top 5
Distracted by the upheaval in the Middle East and $120 per barrel oil, few noted Brazil’s ascent last week to the ranks of the world’s top five economies. Strange given that the move comes just months after China displaced Japan as the second-biggest economy in the world.
Goldman Sachs Asset Management head Jim O’Neill points out that Brazil — part of the BRIC group of big emerging economies – grew 7.5 percent in 2010. By the end of last year the economy was valued around $2.2 trillion. That’s next only to the United States, China, Japan and Germany. And bigger than France and Britain.
O’Neill, who coined the BRICs concept in 2001, says the achievement has come earlier than he had expected. But then Goldman analysts had expected China to overtake Japan only in 2015.
Brazil is unlikely to continue growing at last year’s annual rate of 7.5 percent which was a 24-year high. O’Neill expects trend growth closer to the 5 percent level. But BRIC juggernaut looks unstoppable – Goldman’s latest forecast is for the BRICs’ combined economies to match the G7 rich states in the next decade and overtake the United States by 2018.
In current U.S. dollar terms, combined BRIC GDP at the end of 2010 was just over $11 trillion, more than double the nominal GDP assumed back in 2003,China’s economy is two times larger than it was in 2003 and Brazil’s is three times bigger than 2003 levels.
“Brazil is now the fifth-largest economy. Two down, two to go,” O Neill said, referring to India and Russia which are yet to join the top five.