- BRICS alliance surpasses G7 in terms of purchasing power parity (PPP) with 31.5% contribution to global GDP.
- BRICS aims to challenge G7 and the US dollar, convincing other developing countries to ditch the dollar for local currencies.
- The shift in global trade could tilt financial power to the East and potentially damage the US economy.
BRICS Alliance Market Share
In a remarkable turn of events, the BRICS alliance has emerged as a formidable force, overtaking the G7 countries in terms of purchasing power parity (PPP). According to data from the UK-based research firm, Acorn Macro Consulting, BRICS now contributes 31.5% to the global GDP, slightly ahead of the G7’s 30.7%. This economic shift has significant implications for the balance of power on the global stage.
BRICS: A Rising Economic Powerhouse
The BRICS alliance, consisting of Brazil, Russia, India, China, and South Africa, has been gaining traction as an economic powerhouse. With a combined population of over 3 billion people and a vast array of natural resources, BRICS countries have experienced rapid economic growth in recent years. This growth has enabled them to challenge the dominance of the G7 group, composed of the United States, Canada, France, Italy, Germany, Japan, and the United Kingdom.
The Push to Ditch the US Dollar
BRICS is not content with just economic superiority; it is also seeking to challenge the global financial order dominated by the US dollar. The alliance has been actively persuading other developing countries in Asia, Africa, and South America to abandon the dollar and conduct global trade using their local currencies. This move aims to strengthen their native economies and reduce dependence on the US dollar.
Implications for the G7 and the US Economy
If BRICS succeeds in its endeavor to shift global trade away from the US dollar, it could significantly impact the G7 countries and the US economy. The decline in demand for the dollar would create turmoil in the American economy, as the US would struggle to fund its deficit. This potential disruption highlights the vulnerability of the US dollar’s position as the world’s reserve currency.
BRICS Expanding Influence
BRICS is not resting on its laurels. In a historic decision, the alliance expanded its membership to include 11 countries at the 15th summit in August. This expansion demonstrates BRICS’ growing influence and its ability to rally other nations behind its cause. As more countries join the alliance, the collective power of BRICS will continue to grow, posing a significant challenge to the G7 group.
The East vs. the West
The rise of BRICS and its push to challenge the G7 and the US dollar signifies a broader shift in global economic power from the West to the East. The increasing dominance of BRICS countries in the global economy could tilt the financial power balance in favor of the East, leading to a redistribution of economic influence worldwide.
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