BRICS Economic Situation in 2012 and Outlook for 2013-2014

This paper highlights the pronounced slowdown in the GDP growth of most emerging economies during 2011-2012, including the BRICS countries. Nevertheless the growth rates recorded by China, India and Russia remain robust. With the exception of South Africa, where GDP recorded in 2011 a higher growth rate as compared to 2010, the other analyzed countries revealed a slowdown in their GDP growth both in 2011 and 2012. This is due, on the one hand, to external factors such as unfavorable global economic climate, lower demand from the main markets, reduced investment, and on the other hand, to specific domestic factors. Brazil, China, Russia and South Africa are currently carrying on extensive infrastructure development projects. By contrast, India, with high levels of current account deficit, budget deficit and inflation rates, remains heavily dependent on the evolution of the international investment climate, but also on the government’s ability to remove investment barriers such as high cost of credit or complex and confusing legislation. Taking into account country-specific factors, but also external ones, IMF specialists expect a slight acceleration of economic growth in all BRICS countries during 2013-2014.