BRIC Real GDP measures the total value of all goods and services produced by all four BRIC countries (Brazil, Russia, India and China) adjusted for inflation (i.e., in chained 2010 dollars). The four main components of GDP are personal consumption expenditures, gross private domestic investment, net exports and government spending. Data and projections are sourced from the International Monetary Fund (IMF), which updates data semi-annually in April and October.
Since the late 1990s, the BRIC nations’ growth has far outpaced that of the United States and the European Union. As such, the BRIC countries have been increasingly referred to as a symbol of a shift in the global economic away from the developed G7 economies towards the developing world. As evidenced in the chart above, each country has grown rapidly over the past decade, far outpacing the United States, the European Union and other developed nations. Over the next decade, this trend is expected to continue, as growth is forecast to remain above 10%, far outpacing that of the developed world.
Why is it Important?
The BRIC countries are typically lumped together because each country is deemed to be at a similar stage of newly advanced economic development. Growth has been driven by each country’s ability to change its political system and embrace capitalism. In addition, each nation contains vast natural resources and large populations. In total, the four BRIC countries encompass over 25% of the world’s land coverage, contain about 40% of the world’s population and account for about 17% of the world economy.
Despite rapid growth, each BRIC country already accounts for a large portion of world GDP; China is the second largest economy in the world, while Brazil is the 7th, India is the 10th and Russia is the 11th. As result, the combined economies could eclipse the combined economies of the current richest countries by 2050. Under this scenario, it is expected that China and India will become the dominant global suppliers of manufactured goods and services, with Brazil and Russia gaining dominance as suppliers of raw materials. Brazil is dominant in soy and iron ore and also contains vast oil reserves while Russia has enormous supplies of energy resources, particularly oil and natural gas.
How is it calculated?
GDP is calculated semi-annually by the International Monetary Fund, utilizing the expenditure approach. Under this method, GDP is calculated as the sum of personal consumption expenditures (C), gross private domestic investment (I), government spending (G) and net exports (exports – imports). GDP = C + I + G + (Net Exports)
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