BRIC economies growth predictions 2010 - 11

China, India, Brazil and Russia are powering ahead, the Organisation for Economic Cooperation and Development said on Wednesday, revising upwards its growth outlook for all four largest emerging economies.

With the expected rebound of agricultural output in India, growth should be strong in the near term while inflationary pressures would also remain high amid strong outlook for demand.

Russia should use windfall oil revenues to eliminate fiscal deficits more quickly but if oil prices and capital inflows continue to increase rapidly the country would face another boom-and-bust cycle.

In Brazil, infrastructure investment will help lift growth again despite tighter monetary policies and the beginning of spending cuts

India to invest upto $10 bn in IMF

India is to invest up to $10 billion in the International Monetary Fund as part of a major thrust to wrest a greater say in the running of international financial institutions, Finance Minister Pranab Mukherjee said in recent BRIC countries meetings being held at london.

"India has decided to invest up to $10 bn of its reserves in notes issued by the IMF," Mukherjee said after a meeting of the finance ministers of Brazil, Russia, India and China (BRIC) in London.

The Indian pledge is part of a total of $80 billion that the four BRIC countries will invest into the IMF in order to replenish its fund aimed at helping out countries that are struggling in the current financial crisis.

China will account for $50 billion of this amount, and the rest will be borne by India, Russia and Brazil.

In return, the BRIC countries want a greater say in the running of the IMF and other international financial institutions such as the World Bank, including a larger share of quotas and voting, said Brazil's Finance Minister Guido Mantega.

Part of the BRIC meeting was joined by US Treasury Secretary Timothy Geithner in a move that Mukherjee described as "an acknowledgement of the group's emergence as a key voice in global economic and financial issues".

BRIC's maiden summit to discuss about economic crises

Leaders of Russia, China, India and Brazil will discuss the reform of international financial institutions at their debut summit on Tuesday in the Russian city of Yekaterinburg.

It said in a statement that the four countries, known by the BRIC acronym, would discuss "prospects for dialogue between the Group of Eight and traditional partners" on reform ahead of the G8 summit in Italy in early July.

BRIC countries want to increase their representation in the IMF, where the majority of quotas are currently controlled by developed nations. They are aiming for an agreement on IMF reforms by January 2011. Russia currently has 2.7 per cent of IMF votes, and is unlikely to see its quota increased even under a proposed reform. China holds 3.7 per cent, Brazil 1.4 per cent and India 1.9 per cent.

BRIC states are trying to strengthen their clout as the producers of 15 per cent of global gross domestic product by building up the grouping into a powerful world player. The Kremlin said the four will issue a communique after the summit.
The four are also among the world's seven biggest holders of international reserves. They have expressed worries about the economic stimulus programs in developed nations, fearing they may threaten their savings by driving up future inflation.
Kremlin foreign policy adviser Sergei Prikhodko said on Sunday that BRIC countries were unlikely to discuss a new reserve currency but the reform of the IMF is closely linked to the currency discussion.
China said it is willing to contribute up to $50 billion to the IMF through a purchase of IMF bonds, non-tradable securities which will likely be denominated in the IMF's Special Drawing Rights (SDRs).
Brazil and Russia said they will buy $10 billion each. The debt issue will boost the role of SDRs in international finance.
The statement said the four will also discuss a response to the economic crisis and exchange views on international policy issues, including regional crises, the fight against terrorism, energy and food security.
BRIC will also discuss further steps aimed at "strengthening collective and legal foundations in global policy." The Kremlin said the communique will "reflect common vision of the current stage of global development."

courtesy economictimes

BRIC nations providing stability to world economy

"As the global economy evolves and works its way through the present global financial and economic crisis, BRIC are a factor of stability and growth. This was already evident in our role during the G20 deliberations."

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The two-day conference, in which eminent experts from the four countries are participating, has been organised by the Observer Research Foundation, a New Delhi-headquartered public policy think tank. The preparatory meeting is expected to set the tone for the first BRIC summit to be held in Yekaterinburg next month.

Underlining that the world was on the cusp of a new type of multi-polarity, Menon said it was "becoming clearer and clearer that international decision-making on global economic issues must necessarily be democratised to reflect present realities".

Combined with our growing middle classes and the young populations that most of us enjoy, the BRIC can hope to be a factor of growth and stability in the world economy for decades to come, he said.

BRIC accounts for 40 percent of the world's population, 25.9 percent of its total geographic area, and 40 percent of global GDP. According to Goldman Sachs, BRIC can become collectively bigger than the G7 by 2035.

Menon also stressed on the need for BRIC to make more efforts to add value to their partnership and make their collective voice heard on important international issues. "What we see is a situation where the major powers simultaneously compete and cooperate with each other, each with all the others, to a greater or lesser degree."

Chinese Ambassador to India Zhang Yan and Deputy Chief of Mission of Brazil to India Jose Carlos Fonseca Jr were also present at the inauguration of the conference. "BRIC is a platform for four countries to build consensus and achieve win-win situation. Like any countries, four countries may have differences in their focus, objectives and even interests on various issues," the Chinese envoy said.

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"But interaction within the framework of BRIC can provide the four countries with opportunities to coordinate and cooperate with each other to build synergy between them," he said, while describing BRIC as "guardian of the interests of developing countries".

The Brazilian diplomat stressed on the need for the four countries to strengthen their bilateral relationships that will enable them to be more effectives collectively on the international stage.

source - economictimes.com

India and China better then other bric countries

The global economic downturn has not left the emerging countries unscathed with India and China witnessing moderation in their economic growths, but experts believe the two countries are holding on relatively well among other developing nations.

According to a latest report by leading brokerage firm Sharekhan, "Asian emerging markets too are facing their own share of economic moderation owing to weakness in external trade, foreign inflows and economic sentiment. Importantly, India is holding on well, though the GDP growth has moderated to 5.3 per cent year-on-year (for Q3FY2009) compared with 7.6 per cent in Q2FY2009."

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Experts believe that though the fastest-growing economies of China and India have suffered some moderation, they are showing much more endurance than the other two countries in the BRIC pack - Brazil and Russia.

"Among the BRIC countries, India and China are relatively showing resilience as they are still reflecting GDP growth rates as high as six per cent to eight per cent," SMC Capitals equity head Jagannadham Thunuguntla said.

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Angel Broking Research Head Hitesh Agrawal also believes that India and China are relatively well-placed compared with Brazil and Russia, evident from the contractions witnessed in the latter two over the last six-eight quarters.

with extracts from economic times
posted under - indian economic updates, indian economy, bric countries, economy of india, economic slowdown and india

India, China growth cannot offset global slowdown

Emerging economies such as China and India are growing faster than the rest of the world but still lack the firepower to offset weaker growth in the US and European Union, Fitch Ratings said Monday.

The main emerging markets commonly known as BRIC -- Brazil, Russia, India, and China -- remain very dependent on exports to the industrialised economies with a combined trade surplus of 500 billion US dollars, said James McCormack, head of sovereign ratings in Asia for Fitch.

"The trade flows do not support the emerging markets contributing to offset a recession in the US and weakness elsewhere," McCormack said at a Fitch conference in Singapore.

Many economists say the United States, the world's largest economy, is effectively in recession.

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Some analystts have seen the rapid economic expansion in India and China as reasons for optimism even if the US and other advanced economies weaken.

But Fitch Ratings argues otherwise. "They (BRIC economies) are running very large combined trade surpluses in the order of 500 billion dollars... so if there's weakness in the advanced economies, you are going to see weakness in the emerging markets," McCormack said.

"The trade flows are going the other way, so the conclusion that we reached is that strong growth in the emerging markets is not really going to help offset weakness in the advanced economies."

Both India and China still account for a relatively small portion of global imports which means their economies' influence on international growth is limited, the US ratings agency said.

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India only accounts for two percent of the world's gross domestic product, said McCormack.

"So in some sense, it doesn't matter how fast India grows and it's not a very open economy," he added.

"It's not really going to contribute to stronger growth in other markets. It doesn't import that much. It's just too small." - Fitch Ratings.

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