Kiplinger: Heavy Load for the BRICS

The economic engines of the BRICS (that's South Africa added to Brazil, Russia, India and China) countries are slowing down a bit, according to analysts from Kiplinger. Of course, there is still growth expected in each of the countries.

(By the way, our latest BizVoice magazine features a story on international business but skips the BRIC contingent. South Africa is included in a much larger look at business prospects in all of Africa. Check it out online or in our interactive version).

Back to the BRICS, here's what Kiplinger has to say:

  • Brazil: 2% growth this year and not much more in 2014, partially due to reduced exports to China and continued union protests
  • Russia: About 2.5% this year, maybe 3.5% next. A $14 billion investment in infrastructure and small business lending will help, but hostile climate toward overseas capital is a long-term problem
  • India: 5%, a drop from the 8% annual growth for much of the past decade. High inflation (10%) and decreases in investment and savings rates are troublesome
  • China: 7% this year and slightly more in 2014. Wage increases will make it difficult to maintain massive government investment
  • South Africa: 2%, a drop from 2.5% in 2012, with a similar outlook for 2014

Decade a Good One for Global Growth

Not a lot of Americans are going to look back fondly on 2009 in an economic sense. But if you expand the viewpoint to a longer time frame and make it more global in nature, a George Mason University economics professor says it was a pretty good decade.

According to Tyler Cowen, national leaders around the world are embracing the commercialization of their economies. He writes:

Putting aside the United States, which ranks third, the four most populous countries are China, India, Indonesia and Brazil, accounting for more than 40 percent of the world’s people, and all four have made great strides.

  • Indonesia had solid economic growth during the entire decade, mostly in the 5 percent to 6 percent annual range.

  • Brazil also had a consistently good decade, with growth at times exceeding 5 percent a year.

  • Elsewhere in South America, Colombia and Peru have made enormous progress and Chile is on the verge of becoming a "developed" country.

  • To be sure, in Africa, there is still enormous misery; nonetheless, overall standards of living rose in a wide variety of countries there, with economic growth for the continent as a whole at more than 5 percent in most years.

In a given year, an extra percentage point of economic growth may not seem to matter much. But, over time, the difference between annual growth of 1 percent and 2 percent determines whether you can double your standard of living every 35 years or every 70 years. At 5 percent annual economic growth, living standards double about every 14 years.