Goldman Sachs economist Jim O’Neill, who first coined the term BRIC —— Brazil, Russia, India and China a decade ago —— has forecast that the bloc of emerging economies will grow 6.1 per cent this year.
He also said the growth of the block in 2013 will be 6.9 per cent.
“We expect all the BRIC countries will perform better in 2013 than 2012, although it might not be dramatically better than expectations,” said O’Neill, chairman of Goldman Sachs Asset Management, in a letter to a forum on BRICS (including South Africa) countries’ economies here today.
South Africa joined as the fifth member of the bloc at the end of 2010 and the acronym was renamed BRICS.
“Collectively, we are expecting the BRIC countries to grow by 6.9 per cent up from a probable 6.1 per cent in 2012,” he said.
“We are forecasting (the global growth at) 3.6 per cent for 2013, and 4.1 per cent for 2014,” he said.
But O’Neill said the BRIC countries each face their own challenges in many ways.
“In Brazil, which has been the weakest of the four in 2012, they would hope to see some response from the considerable monetary and fiscal stimulus offered this year,” he said, adding that in Russia, shifting away from energy dependence remains the biggest challenge.
For India, the challenge is making their democracy function better and implementing some of the policies they have stated, said the economist.
O’Neill said the big challenge for China is to sustain the signs of a shift of growth drive to consumers, which looks encouraging.
He said he didn’t think anyone should exaggerate the importance of European and US problems driving the environment of the BRIC countries.
“They should be perfectly capable of driving their own growth rates,” he added.
“Indeed, even with these rates I forecast, by 2014, they might all become collectively bigger than the United States, so I think they are doing just fine, despite their challenges,” said O’Neill.