BRIC Country Analysis Corporate

BRIC Country Analysis

The objective of this report is to carry out economic analysis of Brazil, Russia, India, and China (BRIC) and provide the country projected economic growth, country business environment and country risk. The GDP (Gross Domestic Product) is one of the major economic tools to measure economic growth of a country. Using GDP, the report analyzes the country's economic growth.

China

China is a country enjoying rapid economic growth among the BRIC countries. Over the years, the country has maintained a strong economic growth and between 2007 and 2011, the China's economy showed constant growth with economic output reaching $3.7 trillion in 2010. As being revealed Table 2, China ranks third with reference to personal disposable income where personal disposable income is projected to increase from $2,300 in 2011 to $4,190 in 2015. However, the global economic crisis that affected many advanced countries also affected China making the country's growth rate to decline from 12.8% in 2008 to 9.1% in 2009. Typically, the massive capital injection assists the country to record strong performances compared to other BRIC countries and other countries of the world. (See Fig 1 and Table 1). FDI (Foreign Direct Investments) have been the driving force for the country strong economic growth. In 2010, China recorded 10.4% economic growth making the Standard & Poor's to raise the country's long-term rating from A+ to AA- in December 2010.

"The ratings are supported by the nation's strong liquidity, moderate debt burden, strong foreign investment flows, export growth, and high levels of foreign exchange reserves. China's commitment to economic restructuring and reform has led to a booming private sector, and sustained GDP growth gives credence to the ratings." (Datamonitor, 2011 P. 17).

Table 1: BRIC GDP in U.S.$ Billion

2007

2008

2009

2010

2011

2012

2013

2014

2015

Brazil

1,366.30

1,652.80

1,621.70

2,141.90

2,473.50

2,337.30

2,543.00

2,771.20

2,942.70

Russia

1,300

1,661

1,223

1,487

1,858

1,936

2,073

2,231

2,452

India

1,196.70

1,272.60

1,345.20

1,673.10

1,860.10

1,861.50

2,144.50

2,664.50

3,156.70

China

3,504

4,547

5,105

5,950

7,212

8,096

9,182

10,451

11,948

Fig 1: BRIC Projected Economic Growth

Table 2: BRIC Projected Personal Disposable Income U.S.$

2007

2008

2009

2010

2011

2012

2013

2014

2015

Brazil

4,560.00

5,370.00

5,400.00

6,880.00

7,950.00

7,650.00

8,260.00

8,960.00

9,480.00

China

1,153.10

1,464.30

1,640.00

1,890.00

2,300.00

2,700.00

3,130.00

3,630.00

4,190.00

India

1,070.00

1,170.00

1,230.00

1,400.00

1,640.00

1,900.00

Russia

4,955.10

5,858.70

5,160.00

6,080.00

6,970.00

7,070.00

7,720.00

8,370.00

9,200.00

Fig 2: BRIC Projected Personal Disposable Income U.S.$

Despite the general China optimistic economic outlook, the country risks to suffer economic slow down between 2012 and 2016. The excessive high level of investment and frothy local housing markets are likely to be the cause of the economic slow down. The forecast from Economist Intelligence Unit (2012) reveals that China is likely to record a decline in the economic growth from 9.2% in 2011 to 7.8% in 2016. As being revealed in Fig 3 and Table 3, the country will record a decline in the economic growth in the next 5 years. The country export is likely to remain weak in the next 5-year given deteriorating demand of Chinese product from European Union.

Table 3: China Economic Growth

2011a

2012b

2013 b

2014 b

2015b

2016b

GDP

9.2c

8.2

8.5

8.0

8.0

7.8

Private consumption

9.0

9.2

10.1.....