It may have been Bob Dylan who coined the phrase ‘The times they are a changin’ but he had a point, they certainly are. Give credit to Mr Dylan, he was 51 years ahead of his time had he been an economist.
Move the clock forward to Jim O’Neill the former chief economist of Goldman Sachs who coined the phrase BRIC to represent the high growth economies of Brazil, Russia, India and China.
In January this year there was still belief that the BRIC countries would be the impetus behind worldwide economic growth. take these comments from the revered Jim O’Neill during an interview for Bloomberg;
“By 2035, the BRICs will be as big as the Group of Seven nations while China is in “a reasonable position” to be bigger than the U.S. in 2027 and India may overtake France to become the world’s fifth biggest economy by 2017, certainly before 2020”
It may all well happen, the populations suggest there is a labour force to generate the income, but something is not quite playing as it should.
Recession On The UK Horizon?
Not a word we like to use, recession. We have all moved from recession to austerity, but so long as things are moving forward then we can sit comfortably. After all we are part of the world economy these days, which means we benefit from growth in the BRIC economies, right?
The economy in Brazil has contracted by it’s largest amount in 25 years. Russian GDP is down 9% and China has recently devalued it’s currency. That leaves India whose growth is an impressive 7% but slowing according to a recent BBC report.
Much of the Indian economy depends on harvest and crop output. This means a reliance on monsoon season which is due shortly.
The question is, if the UK is part of the world economy and the high growth economies are stuttering, then maybe that BRIC wall exists.
It may also be that we are more dependent on monsoon season in India than we ever thought we were!
By Dave Farmer
Dave Farmer is founder of Lime Consultancy, a business finance and commercial lending specialist based in Sussex.
For any comments about this post please add them above or contact us direct.