US report warns BRICS economic 'miracle' 'largely over' as world faces decade-long slump
The catch-up boom in China, India, Brazil is largely over and will be followed by a drastic slowdown over the next decade, according to a report by America's top forecasting body.
The US Conference Board's global economic outlook has called into question the 'BRICs' miracle (Brazil, Russia, India, China), arguing that the 'low-hanging fruit' from cheap labour and imported technology has already been picked.
The report said that China's double-digit expansion rates will soon be a 'romantic memory'.
It said that growth will fall to 6.9 percent next year, then to 5.5 percent from 2014 to 2018, and 3.7 percent from 2019 to 2025 as the aging crisis hits and investment returns go into 'rapid decline', the Telegraph reports
Growth in India, where the reform agenda has been 'largely derailed', will fall to 4.7 percent by 2018, and then to 3.9 percent, the report said.
"As China, India, Brazil, and others mature from rapid, investment-intensive 'catch-up' growth, the structural 'speed limits' of their economies are likely to decline," the Board said.
"Mature economies are still healing the scars of the 2008-2009 crisis. But unlike in 2010 and 2011, emerging markets did not pick up the slack in 2012, and won't do so in 2013," it said.
It said that Germany will outperform Italy and France massively over the next five years, implying a bitter conflict within EMU over control of the policy levers.