By Ben Tavener, Contributing Reporter RIO DE JANEIRO, BRAZIL – Brazil has been outperformed by the other three BRIC countries, figures for the second quarter of 2011 have revealed. From the traditional BRIC (Brazil, Russia, India, China) group of emerging global economies, Brazil grew the least, following poor results from the country’s industrial and agricultural sectors. April 2011 BRICS summit participants: Singh, Medvedev, Jintao, Rousseff, and Zuma, photo by Presidential Press and Information Office/Wikimedia Creative Commons License. Although China and India traditionally lead the group, Russia’s economy has been buoyed by higher commodity prices in recent months, due partly to higher oil prices, leaving Brazil trailing in fourth place. Data recently released by the IBGE (Brazilian Institute of Geography and Statistics) – showed sluggish growth in the Brazilian economy, with the country’s GDP in the second quarter of 2011 growing by only 0.8 percent over the previous three months. Of the other ‘traditional’ BRIC countries, the best performance was seen in China with growth in the second quarter of 2011 recorded at 9.5 percent year-on-year, followed by India with 7.7 percent, and Russia on 3.4 percent. Brazil’s economy, however, has slowed more than its BRIC counterparts, managing only 3.1 percent growth year-on-year. Brazil was still in front of South Africa – who became the fifth and newest member of the extended ‘BRICS’ group in April – whose economy expanded three percent in the second quarter of 2011 year-on-year. All these countries recorded lower growth figures in comparison to the first quarter of the year, but are still considerably higher than the U.S. and the Eurozone, which have seen annual growth of just 1.6 and 1.7 percent, respectively. But even though the BRICS countries are all experiencing relatively slower growth, the picture is more complex than it might seem, says Brazilian economic consultancy Tendências, warning against direct comparisons between the BRICS countries. Minister of Finance Guido Mantega, and President Dilma Rousseff, photo by Fabio Rodrigues Pozzebom/ABr. “The BRICS countries have different stories. China and India, for instance, are traditionally buoyed by strong internal consumer figures and domestic investments – which keep growth figures high despite fiscal measures to control inflation,” says Tendências’ Raphael Martello. He says the slowdown in the Brazilian economy in the second quarter of 2011 is linked to the effect of the government’s monetary policy – i.e. regular increases in interest rates since the beginning of the year, despite the drop announced last week. Still, Brazil’s economy is seen by experts as less vulnerable than Russia’s, whose economy is considered to be susceptible to fluctuations in commodity prices, relying heavily on oil and gas, which make up a major part of its exports. Last week saw Brazil’s Banco Central (Central Bank) make the move of cutting the country’s key interest rate – the SELIC – from 12.5 to twelve percent, on the back of a “substantial deterioration” in the prospects for the global economy. The cut in the SELIC means that inflation in Brazil – currently running at nearly seven percent, the highest real inflation in the world – could increase further, despite a number of moves by the government to prevent the country’s economy from overheating. President Dilma Rousseff had been campaigning for a cut in interest rates and Finance Minister Guido Mantega recently announced that he was hopeful the country could still hit 4.5 percent growth in 2011, which was then revised down to four percent. He believes Brazil can reach five percent growth in 2012. In August, a report by PriceWaterhouse Cooper predicted the BRIC countries would be leading growth in the global economy in the next two years, together contributing some forty percent of global GDP growth – more than the G7 economies. 6 Responses to "Brazil Outperformed by Other BRIC Nations" Pingback: Rio’s World Cup and Olympic Legacy: Economics | The Rio Times I Brazil News Pingback: BRICS May Offer Support to Struggling EU | The Rio Times I Brazil News Pingback: Rousseff in First Visit to Africa: Daily | The Rio Times | Brazil News Pingback: Brazil Reports Record Tourism: Daily Update | The Rio Times | Brazil News Pingback: Building BRICS of Foreign Aid: Newest Member of the Club « Blogal Prosperity by the Center for Global Prosperity Pingback: Building BRICS of Foreign Aid: Newest Member of the Club | Blogal Prosperity by the Center for Global Prosperity Leave a Reply Cancel Reply Your email address will not be published.