Economic crisis for all, even for the BRICS

In early 2014, the forecast for the BRICS (Brazil, Russia, India, China and South Africa) insisted on economic growth’s slowdown and continuing growth’s geographic shift toward peripheral countries. Rather a symbolic change yet significant, analysts said that one will not see for quite some time double digits annual economic growth, that is more than 10%, even in China.

Ten months later, the worst predictions have materialized, compounded by unfavorable political circumstances: in the first place, the consequences of the war between Russia and Ukraine. Economic sanctions do weaken the trade between Russia and the European Union; and investor confidence in Russia has deteriorated sharply. The RTS index in Moscow fell by 20% and it now takes almost 40 rubles to buy 1 US dollar, the lowest value since the Russian debt default in 1998.

Worse, Brazil is in recession and the re-election of Dilma Rousseff for a second presidential term seems uncertain. China’s growth should hardly reach 7% in 2015 and South Africa’s a mere 2%. Only India’s may accelerate to 6.5% on that same year, but one must take into account India’s delay if compared to China. The BRICS are experimenting unprecedented disparity that could toll the knell of their collective ambitions and strengthen the theory that we might live in something like a « secular stagnation world ».