Last updated:30 October 2024, 20:20 IST

From 2000 to 2023, the BRICS+ group’s share of global merchandise exports has increased from 10.7% to 23.3%, an impressive increase of 12.6 percentage points

EY India said this trend highlights the growing prominence of the BRICS+ grouping in the world trade arena, indicating a potential shift towards a multipolar global economic landscape. (Image: PTI/File)

The share of the BRICS+ grouping in global merchandise exports could overtake the G7 bloc by 2026, EY India said on Wednesday.

The October edition of EY Economy Watch shows a significant shift in global trade dynamics, with the BRICS+ group rapidly increasing its share of merchandise exports and imports. From 2000 to 2023, the BRICS+ group’s share of global merchandise exports has increased from 10.7 percent to 23.3 percent, an impressive increase of 12.6 percentage points.

In contrast, the G7’s share has seen a notable decline, falling from 45.1 percent to 28.9 percent. At the same time, the rest of the world has kept a relatively stable share and increased slightly from 44.2 percent to 47.9 percent.

The G7 is a group of advanced economies – the US, Canada, France, Germany, Italy, Japan and the UK. This trend highlights the growing prominence of the BRICS+ grouping in the global trade arena, indicating a potential shift towards a multipolar global economic landscape, EY India said.

“Given the current trends and the likelihood of several new members joining the BRICS+ group, the share of BRICS+ in global merchandise exports could surpass that of the G7 group by 2026,” said EY India Chief Policy Advisor DK Srivastava.

BRICS, consisting of Brazil, Russia, India, China and South Africa, has now been expanded by five more members – Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates. Central to this transformation are India and China, two key members of the BRICS+ alliance.

In 2023, they ranked third and first respectively globally in purchasing power parity (PPP), both countries are expected to maintain these positions until 2030. China’s contribution to BRICS+ exports has increased dramatically, increasing from 36.1 percent in 2000 to 62.5 percent in 2023. India has also made significant progress, contributing 7.9 percent to BRICS+ exports in 2023.

EY’s analysis further underlines the increasing importance of high-tech exports from BRICS+ countries. The group’s share of global high-tech exports has increased significantly, from just 5 percent in 2000 to 32.8 percent in 2022.

This change reflects a strategic move towards technology-intensive products, positioning BRICS+ nations as important players in the global high-tech market, it added. In addition to the trade dynamics, the currencies of the BRICS+ countries are gaining traction in the global economy.

The yuan has remained stable, with weak appreciation, while the Indian rupee has faced depreciation, particularly since 2018. Notably, the US dollar’s share as a global reserve currency has declined from 71.5 percent in 2000 to 58.2 percent in 2024, signaling a potential shift towards a more multipolar currency framework.

“As geopolitical tensions continue, the coordinated politics among BRICS+ members could challenge the established dominance of the G7 and the US dollar, paving the way for a new multipolar global economic landscape,” Srivastava said.

The BRICS+ group is establishing a platform to conduct international trade and investment transactions, which could become a low-cost alternative to the existing SWIFT platform. The group is also developing a trade and reserve currency, backed by gold and other selected commodities, Srivastava added.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)