The share of BRICS (Brazil, Russia, India, China, South Africa) in global GDP will rise to 30% starting January 2024 when Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates join the organization compared with 26% now, according to a research paper by the State Bank of India.
The aggregate share of new six members of BRICS in global economic output currently stands at 4%, while national GDP reaches 4% in Saudi Arabia, 2% in each of Argentina, the UAE and Egypt, and 1% in Iran. Ethiopia’s GDP will have almost no influence on growth of BRICS’s share in global GDP, the Economic Times newspaper wrote citing a note by the bank.
Currently, the contribution of China into aggregate GDP of BRICS tops 70%, India – 13%, Russia – 8%, Brazil – 7%, South Africa – 2%, which totally equals BRICS’ share of 26% in global GDP, according to the bank.
The biggest impact of six new member states joining BRICS will be on the share of global oil production that will increase to 40% from the current 18%, which is expected to be the potential game changer for payment system and price discovery, the note said.
Similarly, the share of BRICS in global merchandise trade will rise from 20% to 25%, and that of global services trade will increase to 15% from 12%, the bank said, adding that their share in the global forex reserves will increase by 600 bps to 45%. Moreover, the addition of six new members to the BRICS grouping will see it controlling 46% of the world’s population in 2024.
The decision on Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates joining BRICS made at the organization’s summit in Johannesburg will take force on January 1, 2024.
