Goldman Sachs has predicted that Brazil, Russia, India and China (BRIC’s) are the countries with the most promising economic growth prospects The BRICs also performed the best during the latest financial crisis.
China has been singled out by economists and the US government as having an undervalued currency. An implication is that over the years as the currency exchange rates approach fair value then the economies with undervalued currencies will be larger with future exchange rates.
By PPP measures China, Russia and India should have a lot of currency appreciation over the next few years for China, Brazil and Russia and a bit longer for India. (India is at an earlier development stage and will take longer to get currency appreciation) Brazil will have a little less from PPP but with increasing oil production will have a boost from the strength in the value of commodities (Russia gets a similar boost from commodity prices).
China Yuan Implied exchange rate 3.5 yuan to 1 USD (48% undervalued)
Russia Ruble Implied Exchange rate 18.8 rubles to 1 USD (37% undervalued)
India has an implied 16.164 (65% undervalued)
Brazil has an implied 1.51 (20% undervalued)
China should have double its current economy when exchange rates are fair value. Russia’s economy should be 60% larger. India’s economy should be nearly triple and Brazil’s economy should be 20-25% larger.
The Implied PPP Conversion Rate for India is 16.165
GDP Per Capita (Current Prices, National Currency) INR 47,402.87 .
GDP Per Capita (Current Prices, US Dollars) US$ 1,032.71
Output Gap, Percent of Potential GDP –
GDP (PPP), US Dollars US$ 3,528.61 Billion
GDP Per Capita (PPP), US Dollars US$ 2,932.49
GDP Share of World Total (PPP) 4.946 %
The current US dollar to Indian Rupee exchange rate is 46 rupee to one dollar
Economy watch has a profile of Russia
GDP Per Capita (Current Prices, National Currency) RUB 290,703.77 .
GDP Per Capita (Current Prices, US Dollars) US$ 8,873.61
Output Gap, Percent of Potential GDP –
GDP (PPP), US Dollars US$ 2,126.39 Billion
GDP Per Capita (PPP), US Dollars US$ 15,039.05
GDP Share of World Total (PPP) 3.327 %
Implied PPP Conversion Rate 19.33
Economy Watch profile of Brazil
GDP Per Capita (Current Prices, National Currency) BRR 15,796.24 .
GDP Per Capita (Current Prices, US Dollars) US$ 7,737.32
Output Gap, Percent of Potential GDP –
GDP (PPP), US Dollars US$ 2,002.04 Billion
GDP Per Capita (PPP), US Dollars US$ 10,455.60
GDP Share of World Total (PPP) 2.868 %
Implied PPP Conversion Rate 1.511
Economy watch profile of China
GDP Per Capita (Current Prices, National Currency) RMB 24,379.10 .
GDP Per Capita (Current Prices, US Dollars) US$ 3,565.73
Output Gap, Percent of Potential GDP –
GDP (PPP), US Dollars US$ 8,734.71 Billion
GDP Per Capita (PPP), US Dollars US$ 6,546.30
GDP Share of World Total (PPP) 12.054 %
Implied PPP Conversion Rate 3.724
BRICs in the Future
BRIC GDP forecast from goldman Sachs
Gross Domestic Product (nominal) [2006-2050] (in US$ trillions) Country 2010 2015 2020 2025 2030 2035 2040 USA 14.5 16.2 18.0 20.1 22.8 26.1 29.8 China 4.7 8.1 12.6 18.4 25.6 34.3 45.0 Japan 4.6 4.8 5.2 5.6 5.8 5.9 6.0 Germany 3.1 3.3 3.5 3.6 3.8 4.0 4.4 UK 2.5 2.8 3.1 3.3 3.6 3.9 4.3 France 2.4 2.6 2.8 3.1 3.3 3.6 3.9 Italy 1.9 2.1 2.2 2.3 2.4 2.4 2.6 Russia 1.4 1.9 2.6 3.3 4.3 5.3 6.3 India 1.3 1.9 2.8 4.3 6.7 10.5 16.5 Brazil 1.3 1.7 2.2 2.8 3.7 5.0 6.6 Canada 1.4 1.6 1.7 1.9 2.1 2.3 2.6

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