The economic boom in the BRIC quartet of emerging nations is ‘largely over’, according to a US economic forecaster.
A report by the US Conference Board, one of the leading American economic organizations, has warned that growth built on cheap labour and imported technology in Brazil, Russia, India and China is on the wane and the world will face a dramatic slowdown over the next decade.
The report said growth in India has been hindered by weak reforms and forecast that GDP growth will down to just 4.7% by 2018.
In China, double-digit expansion rates will soon be a distant memory and forecast that growth will plunge to 7% in 2013 and keep falling to 3.7% by the year 2025.
Analysts say the slowdown in growth rates will leave these countries in the ‘Middle Income Trap’, with stagnant incomes preventing people from moving up to the affluent league.
The Board 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 Conference Board’s forecast contradicts a report by the Organization for Economic Cooperation and Development last week, which predicted that China would keep growing at 6.6pc until 2030, and India at 6.7pc — propelling the two rising powers to global dominance.