BRICS, a set of countries grouped as an alternative to the G7, is now the world’s largest gross domestic product (GDP) bloc, taking purchasing power parity into account, according to reports from Acorn Macro Consulting. Powered By China’s growth, the group now contributes 31.5% to the global GDP, while the G7 provides 30.7%.
BRICS Countries Shift the Economic Scale
BRICS, a group of countries comprising Brazil, Russia, India, China, and South Africa, has emerged as the world’s largest GDP bloc, leaving the G7 economies behind. According to data provided by Acorn Macro Consulting, a U.K.-based macroeconomic research firm, the BRICS bloc now contributes 31.5% to the global GDP, surpassing the G7, which currently accounts for just 30.7%.
A chart provided by Richard Dias, a consultant at Acorn, shows the constant growth of BRICS as compared to the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the European Union), and also predicts that the gap will only grow bigger in the coming years.
The big push for the BRICS bloc comes from the growth of the Chinese economy, which surpassed the U.S. GDP measured taking purchasing power parity (PPP) into account, in 2014. According to International Monetary Fund (IMF) estimations, China has a GDP PPP of $30 trillion, ranking first in the world, while the U.S. trails in second place with $25 trillion.
Further Growth Expected
The gap between these groups and the economic influence of BRICS could keep growing in the short term, as more countries are interested in joining the ranks of the alternative group. In February, Anil Sooklal, South Africa’s ambassador to BRICS, stated that this year would be crucial for the expansion of the bloc, as the members were already defining the recommendations and criteria for the acceptance of new members.
Significant economies have already applied to be members of the group, with Saudi Arabia, Egypt, and Bangladesh having acquired equity in the New Development Bank, BRICS’ funding organization. Other countries like Iran, Algeria, Argentina, and Turkey are also interested in joining the bloc.
While it is still only a project, in July 2022 BRICS countries proposed the idea of issuing their own currency in order to undermine the dominance of the U.S. dollar when it comes to international settlements. More recently, President Xi of China and President Putin of Russia have decided to push the Chinese yuan as a settlement currency between Russia and emerging economies in Latam, Asia, and Africa.
What do you think about the rise of BRICS as the largest GDP bloc in the world? Tell us in the comments section below.