Reasons for BRIC’s slowdown

BRIC stands for the group of countries- BRAZIL, RUSSIA, INDIA, CHINA.

After four times faster growth of BRIC in the past decade compared to the America’s, now they are slowing down with no hopes of surging up in the next few years. This year BRIC recorded $15 billions of outflow and BRIC indexes may fall another 20% next year, buffeted by the liquidity squeeze stemming from Europe's sovereign debt crisis. Few main reasons for this slowdown are-

• Higher Wages
• Higher Interest Rates
• Currency Volatility

This is again confined to the lowered GDPs in these countries due to less supply of workers to the production. Average economic growth in the BRIC countries will decelerate to 6.1% next year from a high of 9.7% in 2007, according to September estimates by the International Monetary Fund.

(Courtesy- The Economic Times, 29th Dec.2011)