GDP Of BRICs To Surpass G7 In Two To Three Years, Senior Russian Official Says

The combined gross domestic product (GDP) of the BRICs grouping of emerging market nations — Brazil, Russia, India, China, and South Africa — will exceed that of the Group of Seven (G7) member states in the next two to three years, a senior Russian official said Monday during the first-ever BRICs Parliamentary Forum in Moscow.

“In 2014, the total gross domestic product of BRICs countries reached 30 percent (of the world’s GDP). This is less than that of the G7, but the difference is seven or eight percent. The combined GDP of the BRICs countries, according to the International Monetary Fund is $32.5 trillion (by purchasing power parity); the G7’s is $34.7 trillion. Given that, the BRICs members mostly show much higher growth rates than the G7, we can assume that in the next two or three years the aggregate GDP of the BRICs countries will exceed the G7’s,” said Alexsey Pushkov, the head of Russia’s State Duma Foreign Relations Committee.

The economic center of the world is changing and the developed West will have to share its influence and authority in the global arena with players like BRICs, said Pushkov.

“The West was very skeptical about BRICs. Skeptics are now confounded. BRICs will soon surpass G7 in terms of GDP,” Pushkov posted on Twitter.

В Москве открылся первый Парлам.форум БРИКС. Было много скепсиса на Западе в адрес БРИКС. Скептики посрамлены: скоро БРИКС по ВВП обойдет G7

— Алексей Пушков (@Alexey_Pushkov) June 8, 2015

In regards to Western counter-efforts to consolidate and integrate, Pushkov commented on the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the U.S. that aims at tariff reductions and the elimination of regulatory barriers to business.

If signed, it would turn Europe into the branch of the U.S. economy, Pushkov said.

Pushkov’s comments came as G7 leaders were meeting in Kruen in the Bavarian Alps. Last year Russia was expelled from the group over the annexation of Crimea.

The U.S. is trying to redistribute international markets bypassing the BRICs nations, said Russian State Duma Speaker Sergey Naryshkin.

“U.S. is holding talks on global agreements behind the scenes — Trans-Pacific and Trans-Atlantic trade partnerships — without participation of us and many other WTO (World Trade Organization) member-countries,” Naryshkin said. “In fact, new rules are being developed which could potentially influence the situation in global trade, redistribute markets and change current competitive balance,” he added.

Naryshkin said that he hoped the results of the first-ever BRICs Parliamentary Forum on Monday would be used in work at July’s summit.

Naryshkin stressed that Russia together with its counterparts from Brazil, India, China, and South Africa “will lay the foundations for a parliamentary dimension of the BRICs group”.

BRICS 2014 summit participants: Russian President Vladmir Putin, India Prime Minister Narendra Modi, Brazilian President Dilma Rousseff, Chinese President Xi Jinping, South African Presdient Jacob Zuma. Photo courtesy of Wikimedia.

In July 2014, the BRICs group signed a document to form a reserve currency pool worth over $100 billion — known as the Contingent Reserve Arrangement (CRA) — as well as a $100 billion New Development Bank (NDB), also known as the BRICs bank.

The BRICs bank will be used to finance infrastructure projects in the BRICs countries as well as other emerging market countries.

The launch of the BRICs bank is seen as a first step to break the dominance of the U.S. dollar in global trade, as well as dollar-backed institutions like the IMF and the World Bank, both U.S.-based institutions that BRICs countries have had little influence within.

Russia expects to launch the bank in addition to the currency reserve pool at the July summit, Russian President Vladimir Putin has said.

The summit of the Shanghai Cooperation Organisation (SCO) and BRICs is set to take place in Ufa – the capital city of the Republic of Bashkortostan, Russia – on July 8-10, 2015.