BRICS are more and more outstripping G7

BRICS are more and more outstripping G7

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By Tahereh Amirzadeh, Hydrogen Energy Consultant/Expert - Energy/Natural Resources Structured Finance and M&A Professional

Graduated from University of Liverpool in International Management with specialization track in Oil & Gas, from Ecole Polytechnique in Leading International Industrial Projects and from ESSEC Business School in Strategic Management of International Business. Certified in Liquefied Natural Gas from IFP School and in Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) in Banks.?

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Septembre 28, 2023

While in 1992, G7’s Global GDP Share was 45.80%, it decreased to 42.34% in 2002, 32.82% in 2012 and 30.31% in 2022. In contrast, while in 1992, BRICS’s Global GDP Share was 16.45%, it increased to 19.34% in 2002. 28.38% in 2012 and 31.67% in 2022.

According to the IMF’s projections, in 2023, the nominal GDP of G7 will be $46 trillion: $26.9 trillion for the United States (US), $4.4 trillion for Japan, $4.3 trillion for Germany, $3.2 trillion for the United Kingdom (UK), $2.9 trillion for France, $2.2 trillion for Italy and $2.1 trillion for Canada. In contrast, in 2023, the nominal GDP of BRICS will be $27.7 trillion: $19.4 trillion for China, $3.7 trillion for India, $2.1 trillion for Brazil, $2.1 trillion for Russia and $0.4 trillion for South Africa.

According to the IMF’s projections, in 2023, the PPP GDP of G7 will be $52.4 trillion: $26.9 trillion for the US, $6.5 trillion for Japan, $5.6 trillion for Germany, $3.9 trillion for the UK, $3.9 trillion for France, $3.2 trillion for Italy and $2.4 trillion for Canada. In contrast, in 2023, the PPP GDP of BRICS will be $56 trillion: $33 trillion for China, $13 trillion for India, $4 trillion for Brazil, $5 trillion for Russia and $1 trillion for South Africa.

However, according to the World Bank, as from January 2024, Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE) will be members of the BRICS, their PPP GDP will surpass the PPP GDP of the G7 by over $11 trillion in 2024 projections. However, according to the World Bank, G7 will still have an upper hand in terms of nominal GDP with a $14 trillion advantage in 2024 projections.

Indeed, according to the World Bank, nominal GDP of the G7 is $43.77 trillion against $25.91 trillion for the BRICS and $29.15 trillion for BRICS+, GDP on PPP basis of the G7 is $49.23 trillion against $52.32 trillion for the BRICS and $60.15 trillion for the BRICS+ and the population of the G7 is 775.2 million against 3,248.1 million for the BRICS and 3,663.1 million for the BRICS+.

Interestingly, according to the World Bank, the total debt of the G7 will reach $55.5 trillion in 2024 ($32.9 trillion only for the US, an increase by 53% in the past five years!) while the total debt of the BRICS+ will reach $8.9 trillion only. China is one of the US largest debt holders, with about $859.4 billion in US treasuries.

Moreover, with 3.9 billion people, BRICS+ will represent nearly one-half of the world’s population. With Iran, Saudi Arabia, and the UAE joining, the BRICS+ will have 6 of the world’s top 10 oil producers among its members and will control 38% of the world’s natural gas supply, 60% of the oil exports and 67% of the coal production. In addition, the BRICS+ will control one third of the world’s food, 90% of the supply chain for solar panels and electric car batteries as well was minerals vital for the energy transition and the digital transformation.?

China and India, the two world’s most populous countries with more than 1.4 billion people each, are also the two largest buyers of oil and gas. So far, the two countries have succeeded to overcome their rivalry.

The US and the BRICS are competing to control the Latin American market. Despite its financial difficulties, Argentina is then a prize of war for Brazil and the BRICS.

Egypt is the largest Arab populous country and is a reference in the Muslim Sunni world.

Ethiopia is the second largest African populous country and the second world largest Christian Orthodox country (after Russia).

Iran holds the world’s largest gas reserves and is the fourth largest oil reserves holder in the world. It is the world’s largest Muslim Shia populous country and has strong influence in Iraq where two thirds of the population and the Prime minister (by constitution) are Shias. Iraq is the second largest oil producer within the OPEP members.

Saudi Arabia is the country where Islam is born and is a reference in the Muslim Sunni world. It is the world’s largest oil producer and reserves holder.?

The UAE are a financial, digital, energy and logistic hub in the Middle East and the world. It is also an important oil producer. In Dubai, the debt has fallen to 25% of GDP against 78% in 2020 (S&P estimates) by repaying bank and market debt as well as loans from Abu Dhabi and UAE Central Bank and by benefiting from a booming economy.