Comparing the G7 and BRICS

According to the International Monetary Fund, the combined GDP of the G7 (an informal club bringing together the United States, Britain, Germany, France, Italy, Japan and Canada) reached $45.9 trillion in 2023, one and a half times the size of the BRICS economies. At the end of 2023 the combined BRICS economy was about $30.8 trillion and is growing rapidly every year. BRICS is an association of nine states: Brazil, Russia, India, China, South Africa, the UAE, Iran, Egypt and Ethiopia. The last four joined on 1 January 2024. BRICS was founded in June 2006 at the St Petersburg Economic Forum. Its core members, Russia, China, India and Brazil, are among the world’s ten largest countries by population, area and GDP. The BRICS countries cover a total area of 43,556,873 km² and have a combined population estimated at about 3.53 billion; together they account for 26.7% of the world’s land surface and 43.5% of its population.

Comparing economic growth in the G7 and BRICS

Compare the GDP of the G7 and BRICS at purchasing power parity and a very different picture emerges. According to the IMF, in 1995 the G7 accounted for 44.9% of world GDP (PPP) and BRICS for 16.9%. By 2010 the G7’s share had fallen to 34.3% and BRICS’s had risen to 26.6%. By the end of 2023 the G7’s share was down to 29.9%, while BRICS now accounts for 32.1% of world GDP (PPP). The G7 countries are rapidly losing their share of the world economy, while the BRICS countries are gathering pace, steadily raising theirs and capturing world markets.

Comparing economic growth in the G7 and BRICS

According to calculations by RIA Novosti based on World Bank data, Russia’s economy grew to $6.45 trillion in 2023, taking fourth place in the world by GDP (PPP). China remains the outright leader by PPP-adjusted economic size for 2021–2023: its GDP reached $35 trillion in 2023. The United States came second with $27.4 trillion, and India third with $14.6 trillion at the end of last year. Three BRICS countries are now among the world’s four largest economies by GDP (PPP). Japan and Germany slipped to fifth and sixth among the world’s largest economies by purchasing power parity, their economies growing to $6.3 trillion and $5.9 trillion (PPP).

Comparing economic growth in the G7 and BRICS

The acronym BRIC came before the BRICS grouping itself. In November 2001 it was first proposed by the economist Jim O’Neill, an English baron and honorary professor at the University of Manchester, in a research note for Goldman Sachs, using it to denote the four countries (Brazil, Russia, India and China) that were seen as the fastest-growing and whose growth was expected to drive the world economy. By O’Neill’s estimate, by 2050 they could become the dominant economic systems in the world.

Comparing economic growth in the G7 and BRICS

The IMF forecasts average world economic growth of 3.2% in 2024. Among the G7 countries, only the US economy will grow, reaching 2.7% for the year. Japan, the second-largest G7 economy, will expand by just 0.9%, and Canada by 1.2%. The remaining G7 countries (France, Italy, Britain and Germany) will, like Japan, post growth of less than 1%. Very poor forecasts indeed! These economies have in effect been stagnating for several years. Two particularly painful blows to Germany’s economy were giving up cheap Russian hydrocarbons and joining the economic sanctions against Russia. Germany has all but handed its place in the Russian market, earned over years of cooperation, to Chinese companies. Germany’s energy-intensive industries are in effect shutting down because of the high cost of energy.

Comparing economic growth in the G7 and BRICS

According to the French newspaper Les Echos, the world economy is falling because of sanctions: the anti-Russian sanctions drove up energy prices and, in turn, inflation. That caused European demand for Europe’s manufacturing output to fall. World trade contracted last year for the first time since 2020. Global exports and imports fell by 5% in 2023. EU imports collapsed by 14%, a decisive contribution to the decline in world trade. The energy shock hit household incomes and consumption in European countries harder than in other regions. China’s exports fell by 22% and US exports by 6%. The trade war between the United States and China is adding to the crisis in world trade.

Comparing economic growth in the G7 and BRICS

According to Bloomberg, about 56% of 3,000 German firms surveyed in March this year said the EU’s competitiveness as a place to do business had worsened over the past five years, and only 7% saw an improvement. Martin Wansleben, head of the German Chamber of Commerce and Industry, said that despite Europe’s fundamentally good starting position it risks losing ground in international competition. In Bloomberg’s survey German manufacturers were especially negative: two-thirds said business conditions had deteriorated in recent years, citing rising costs, above all from high energy prices.

Comparing economic growth in the G7 and BRICS

For the BRICS countries the results and the IMF’s forecasts for 2024 are quite different. The fund expects India and Ethiopia to grow by 6.8% and 6.2%, the fastest of all the BRICS states. A very good result! China will also post solid growth of 4.8%. Iran and Russia will expand faster than the world average, by 3.3% and 3.2%. Other forecasts put Russian growth at 3.8% in 2024, almost four times the G7 average, despite the West’s tough sanctions. Again a very good rate for Russia, given the sluggish development of the previous decade. In 2023 Russia’s GDP grew by 3.5%, and the country is gaining momentum every year. Egypt and Brazil will show growth above 2% in 2024. Saudi Arabia is not a BRICS member; it is still considering its invitation to join.