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Despite a global economic slowdown, BRICS has been a main economic engine for the world economy.
Countries such as Brazil and Russia, which struggled with recession in the past two years, are expected to turn the corner and post GDP growth in 2017.
Russia’s GDP contracted 1.2 per cent in Q1 2016 but that slowed to 0.6 per cent in Q2, according to data from the Rosstat federal statistics service.
This is a marked improvement to its 3.7 per cent contraction in 2015; it contracted 3.8 per cent in Q4 in 2015.
A recent report from the Economic Development Ministry indicates that the Russian economy will beat recession in 2016 and show GDP growth once again in 2017 as long as oil prices remain above $45 a barrel.
In Brazil, the IMF says that confidence in the Brazilian economy is slowly reawakening. It said that Brazil’s contraction (3.8 per cent) in 2015 would moderately subside to (3.3 per cent) in 2016. It forecast positive growth for Brazil in 2017 but voiced concern over ongoing corruption and political scandals which have rocked Brazil.
The question right now is whether the political environment will stabilize following the impeachment of Dilma Rousseff.
China and India, meanwhile, continue to have the highest GDP growth in the world.
For China, beginning October 1, “the renminbi [currency] will be considered by the international community as a freely usable international currency, and will join the basket of the Special Drawing Right together with the US dollar, the euro, the yen and the British pound,” IMF chief Christine Lagarde announced on Friday.
This is the first time the SDR has been expanded to include an additional currency.
BRICS countries have also made gains in the World Economic Forum’s Global Competitiveness Report 2016-2017.
While it faced the impact of a corrective economic policy since 2015, China remained highest on the scale – at 28 – among BRICS nations.
Despite battling a recession of its own, Russia moved up two places to 43. South Africa, which has seen its rand currency fluctuate against the dollar, also moved up two places to 47.
India’s 16-point jump to 39th position is the most notable.