BADGERSBadgers-group analysts

Polyakova, Sorokin, Rzayeva, Novikov, Karpukhina

Our Team

BRICS countries: New

Centers of Growth

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Brazil

• Population: 196,7 million

• Area: 8,5 million km2 (5th)

• Capital: Bazilia

• Main exports: o transport equipment, iron ore,

soybeans, footwear, coffee, autos

• Main imports:o machinery, electrical and

transport equipment, chemical products, oil, automotive parts, electronics

• Major trading partners:o The US, China, Argentina

• GDP per capita: $12,916

• Inflation: 6,9 %

Advantages Problems• The ninth largest

economy worldwide in the terms of GDP

• One of the fastest growing emerging economies in the world

• Rich deposits of minerals and natural resources

• Misconceived and inefficient use of fiscal policy

• Bribery and corruption

Growth Projections:• 1.6% (2012) and 4% (2013)

The Economy

Risks & MeasuresRISKS: MEASURES:

• Risk of ‘overheating’

• Government’s inability to take public investments forward

• Prudential monetary policy

• Prudential fiscal policy

Russia

• Population: 143.3 million

• Area: 17,075,400 km2 (1st)

• Capital: Moscow

• Main exports: o petroleum and petroleum

products, natural gas, metals, wood and wood products, chemicals, and a wide variety of civilian and military manufactures

• Main imports:o machinery, vehicles,

pharmaceutical products, plastic, semi-finished metal products, meat, fruits and nuts, optical and medical instruments, iron, steel

• Major trading partners:o European Union, CIS, China, Japan

• GDP per capita: $13,089

• Inflation: 6,1%

Advantages Problems• Huge territory• Large reserve of

raw-materials• Making single high

quality products• Low internal energy

prices

• Huge inequality between different classes

• Low efficiency• Dependence on oil

and gas

Growth Projections:• 3.75% (2012 and 2013)

The Economy

Risks & MeasuresRISKS: MEASURES:

• Downside risks• Deterioration of

external balances• Spillovers from

the Middle East crisis

• Polarization of the Russian society

• Rebuilding fiscal policy buffers

• Structural reforms

• A strengthening of fiscal frameworks

• Monetary policy tightening

India• Population: 1.2 bn (2th)

• Area: 3.3 million sq km (7th)

• Capital: o New Delhi

• Main exports: o Engineering goods, petroleum

products, chemicals, pharmaceuticals, gems and jewellery, textiles and garments, agricultural products, iron ore.

• Main imports:o Crude oil and related products,

machinery, electronic goods, gold and silver

• Major trading partners:o EU, China, the USA, the United

Arab Emirates

• GDP per capita: US $3,700• Inflation: 6.95%

Advantages Problems• Human resources• Developed financial

market • Healthy banking

system• Growth in the standard

of living of Indians

• Population explosion

• Poverty• Unemployment• Rural urban divide

Growth Projections:• 7% (2012 and 2013)

The Economy

Risks & MeasuresRISKS: MEASURES:

• Widening Current Account Deficit (CAD)

• Resurgence of Inflation

• Rising Oil Prices

• Maintaining Fiscal Discipline

• Public expenditure to health and education

• Reforms in labor lows• Reorganization of

agriculture sector• Introduction of

financial reforms

People's Republic of China

• Population: 1.347 billion

• Area: 9,706,961 km2 (3rd/4th)

• Capital: Beijing (Peking)

• Main exports: o Electrical and other machinery,

including data processing equipment, apparel, textiles, iron and steel, optical and medical equipment

• Main imports:o Electrical and other machinery,

oil and mineral fuels, optical and medical equipment, metal ores, plastics, organic chemicals

• Major trading partners:o Japan, South Korea, US,

Germany

• GDP per capita: $5,414

• Inflation: 5.4%

Advantages Problems

• Human resources

• Huge trade surplus

• Steady growth of

the economy

• Possible slowdown

in economic growth

• Long-term inflation

• Challenges from

rebalancing

Growth Projections:• Above 8% (2012 and 2013)

The Economy

Risks & MeasuresRISKS: MEASURES:

• Spillovers to China

from the euro area

• Sharp slowdown in

investment

• Rising Oil Prices

• Deploying fiscal stimulus

• Targeted support to the needy

• Accelerating reforms

The Republic of South Africa

• Main exports: o Gold, diamonds, metals and

minerals, cars, machinery

• Main export partners: o China, US, Japan, Germany

• Main imports:o Petrochemicals, car

components, petroleum oils

• Main import partners:o China, Germany, US, Saudi

Arabia

• GDP per capita: US $8,066• Inflation: 5%

• Population: 50.5 million

• Area: 1.22 million sq km (25th)

• Capitals: o Pretoria (executive capital); o Cape Town (legislative

capital); o Bloemfontein (judicial capital)

Advantages Problems

• Services – 66%

• Diversified Economy

• High levels of:o unemploymento inequality

• Poverty• Crime

AgricultureIndustryServices

Growth

Projections:• 2,6% (2012)

• 3% (2013)

The Economy

Risks & MeasuresRISKS: MEASURES:

• Further growth of

unemployment,

poverty, inequality

• External Spillovers

(esp. in the euro area

& China)

• Soft commodity prices

• Supportive vein:o stengthen policy buffers

o contingency plans

• Monetary policy:o accomodative

• Fiscal policy:o sustain debt rate

o fiscal deficit is allowed to

support activity

Bibliography• BRIC-a-brac. [The Economist]. Aug 8th, 2012• India: 2012 Article IV Consultation. [International

Monetary Fund]. 2012 - 69 pages• Keeler, D. Special Report: BRICs.[Global Finance]. February,

2012• The BRICs: propping up the global economy [Grant thornton

international]. 2012 – 10 pages• The BRICs report. [Oxford University Press]. 2012. – 182

pages• Will India Be The First BRIC FallenAngel?

[Standard&Poor’s].June 8th, 2012• Zotin, A. BRIC – stuck in between the past and the future.

[Kommersant]. September 18th, 2012

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