BRIC countries: an overview

The term BRIC is a short form of Brazil, Russia, India and China. There is so much discussion about the BRIC countries that I thought we should take a look at what the BRIC countries mean in the investment world.

World economies have seen many shocks and turmoil in the recent past. That is the main reason why the BRIC countries have gained importance in the eyes of investors around the world. Reduced domestic economic growth rates, reduced domestic demand and falling markets have created major threats to the survival of global investors and they are looking for new avenues to invest their funds to ensure a good return on capital and also the safety of your capital.

BRIC definition:

Jim O’Neill, head of Global Economic Research at Goldman Sachs, came up with this BRIC for short for Brazil, Russia, India and China. He first defined the BRIC countries in his report on emerging markets in 2001.

What differentiates BRIC from other economies:

According to Jim O’Neill’s BRIC Report, the combined economic wealth of these four nations would be greater than the wealth of the richest nations by the year 2050. As of today, these four countries together would account for about 40% of the world population and about 25% of global soil. This optimistic scenario would offer better growth and security for investors.

* Brazil is the fifth most populous country in the world and the ninth highest GDP in the world.

* Russia ranks seventh in highest GDP.

* India is the second most populous country in the world and the fourth with the highest GDP.

* China is the most populous country in the world and the second highest GDP. The first place is the United States.

According to the Goldman Sach report, these four countries would be experiencing sustained growth over the next 40 years that would surpass European countries in terms of economic growth.

We have seen many ups and downs in global economies due to the credit crunch and various bubbles created through improper business practices. Emerging markets are becoming a haven for global investors due to their realistic and somewhat conservative growth policies.

The BRIC countries offer a high level of economic growth with a sustainable rate of economic activity that is estimated to last for a few decades to come. Given the turbulent global market environment, investors are attracted to the BRIC nations due to the high rate of return on investment plus anticipated capital appreciation.

As a global investor, the growth potential of these countries cannot be ignored and any investment in these countries would be guaranteed to improve portfolio performance. This has diverted the attention of most global investors from Western countries to the BRIC nations. This global attention would again help these countries make the most optimal use of their resources and make these markets more competitive by ensuring greater transparency in market operations.

The knock-on effect of this would last for at least 3-4 decades to come and these countries would become a focal point for global investors to invest.

In short, I can say that as a global investor, you cannot ignore the importance of the BRIC countries and you can compare these countries with each other to find out which one is the best to invest in and optimize your investment portfolio.

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