Officials, including Ethiopian Prime Minister Abiy Ahmed, Egyptian President Abdel Fattah al-Sisi, South African President Cyril Ramaphosa, Chinese President Xi Jinping, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, President of the United Arab Emirates Sheikh Mohamed bin Zayed Al Nahyan, Iranian President Masoud Pezeshkian and Brazilian Foreign Minister Mauro Vieira, attend the BRICS summit in Kazan, Russia October 23, 2024.
| Photo Credit: Reuters
The share of BRICS+ grouping in global merchandise exports can overtake the G7 bloc by 2026, EY India said on Wednesday (October 30, 2024).
The October edition of EY Economy Watch reveals a significant shift in global trade dynamics, with the BRICS+ group rapidly increasing its share in merchandise exports and imports.
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From 2000 to 2023, the BRICS+ group’s share of global merchandise exports has risen from 10.7% to 23.3%, marking an impressive increase of 12.6 percentage points.
In contrast, the G7’s share has seen a notable decline, dropping from 45.1% to 28.9%. Meanwhile, the rest of the world has maintained a relatively stable share, increasing slightly from 44.2% to 47.9%.
G7 is a grouping of advanced economies — the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom.
This trend highlights the growing prominence of the BRICS+ group in the global trade arena, suggesting a potential shift towards a multipolar global economic landscape, EY India said.
“Given the present trends and the likelihood of several new members joining the BRICS+ group being strong, the share of BRICS+ in global merchandise exports can overtake that of the G7 group by 2026,” EY India Chief Policy Advisor D.K. Srivastava said.
BRICS, consisting of Brazil, Russia, India, China and South Africa, has now expanded with five additional members — Egypt, Ethiopia, Iran, Saudi Arabia and the UAE.
Central to this transformation are India and China, two key members of the BRICS+ alliance. In 2023, they ranked third and first, respectively, globally in terms of purchasing power parity (PPP), both countries are projected to retain these positions by 2030.
China’s contribution to BRICS+ exports has surged dramatically, increasing from 36.1% in 2000 to 62.5% in 2023. India has also made significant strides, contributing 7.9% to BRICS+ exports in 2023.
EY’s analysis further underscores the increasing importance of high-tech exports from BRICS+ countries.
The group’s share of global high-tech exports has risen significantly, from just 5% in 2000 to 32.8% in 2022.
This shift reflects a strategic move toward technology-intensive products, positioning BRICS+ nations as vital players in the global high-tech market, it added.
In addition to trade dynamics, the currencies of BRICS+ nations are gaining traction in the global economy. The Yuan has remained stable, with slight appreciation, while the Indian rupee has faced depreciation, particularly since 2018.
Notably, the share of the U.S. dollar as a global reserve currency has declined from 71.5% in 2000 to 58.2% in 2024, signalling a potential shift toward a more multipolar currency framework.
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“As geopolitical tensions continue, the coordinated policies among BRICS+ members may challenge the established dominance of the G7 and the U.S. dollar, paving the way for a new multipolar global economic landscape,” Mr. Srivastava said.
The BRICS+ group is establishing a platform for conducting international trade and investment transactions, which could become a low-cost alternative to the existing SWIFT platform.
The group is also developing a trade and reserve currency, backed by gold and other select commodities, Mr. Srivastava added.
Published – October 30, 2024 04:32 pm IST
