Recent growth figures from the IMF continue the trend of improving growth for the rising powers and the BRICSAM – for some but not for all. What does this suggest about global growth?
Much has been made of the strong rebound by China in particular but also India. As the GDP forecasts from the IMF indicate in Table 1 there are some evident rebounds from the serious contradiction in monthly and quarterly figures from the year previously. Moreover growth predictions have improved or held steady from one set of quarterly figures to the next. Beyond the strong growth predictions for India and China, Brazil has improved materially as well.
The Table includes all of what CIGI calls the BRICSAM. Not only is there the triumvirate of rising powers – China, Brazil and India – but also South Africa and Mexico. That leaves the rather more awkward ‘A’ in BRICSAM. Sometimes I have fudged the ‘A’ by including it with the ‘S’ and calling it South Africa – thus turning the BRICSAM into the G5 plus Russia.
Then again I sometimes identify the ‘A’ as ASEAN. Now besides the difficulty of tracking a multilateral organization – light on the organization side – and in contrast with the other singular states - but acquiring data can be a challenge. In addition I have to be consistent over which ASEAN. In Table 1 I have ‘lighted on’ the ASEAN 5 - Indonesia, Malaysia, Philippines, Thailand and Vietnam. But I could examine the ASEAN 6 or the ASEAN 10 – the full ASEAN membership. But using the ASEAN 10 includes some states with rather little heft and rather shallow economic growth. Or as I’ve done here I could just have included Indonesia – the largest of the ASEAN members and a not unreasonable surrogate for the organization with the added benefit of now being a G20 country. It’s not a dilemma with immediate solution.
Table 1 – Projected Growth from the IMF
With growth emerging in the triumvirate, what is startling is the division in two parts. While China is predicted to rise 8.5 percent, Russia is predicted to still contract at minus 7.5 percent and Mexico is predicted to contract at minus 7.3 percent.
Now it well may be that Russia can be seen as anomalous – an economy driven principally by oil. Possibly some of Mexico’s contraction also may be a result of the oil economy. On the other hand, Mexico’s deep contraction may be a consequence of its very close economic relationship with the United States. And it may even in part be a consequence of the deep and ugly drug war being waged in Mexico’s north especially. But the growth forecasts for the BRICSAM split quite noticeably.
If growth is significant in some and unavailable in others, the follow on question is whether those that are growing have the capacity – given that there only a limited immediate number of the rising powers experiencing growth – to represent an engine of growth in the global economy. On its face the growth figures and the limitation on those BRICSAM countries experiencing growth would suggest it’s unlikely.