Table of Contents
Executive summary 2
Brazil: A faded success story striving to recover 2
Russia: Threatened by endemic economic problems 2
India: Massive debt & public bankruptcy have restricted economic growth 2
China: The world's growth engine begins to stall 3
South Africa: The late BRIC entrant with multiple economic issues 3
Brazil: A faded success story striving to recover 8
Recession has shaken faith in Brazilian progress, but some bright signs have emerged 8
Poor governance resulted in high inflation, high debt and high interest rates instability must not be allowed to repeat it 9
Petrobras scandal still lingers on, but government action is positive and could have wider impact 11
Major reforms to spending have occurred due to recession, but tax reform must also follow 12
Russia: threatened by endemic economic problems 14
Corruption is rife and hampers the ability of the Russian economy to function 14
Economically, oil and gas dominate, creating a need for diversification 15
Living standards are falling for most, leaving Russia struggling to fulfill early BRIC predictions 17
Sanctions still hurt, highlighting the need for change post-recession 18
India: Massive Debt & Public bankruptcy has Restricted Economic Growth 20
India's debt is still sizeable when compared with neighboring economies 20
Government spending could be much more generous 22
India’s government spending is low in comparison to the rest of the BRICS nations 23
Tax revenues are being spent on paying back debt as opposed to developing key sectors 23
Tax receipts are used to subsidize many industries to push for better living standards in India 25
Less room for the public sector, more room for private 26
State-owned-firms are left with losses larger than Zimbabwe’s GDP 26
Some firms do not comply with regulations breeding governance issues internally 27
China: The world's growth engine begins to stall 28
Current Chinese growth targets are the lowest for a quarter of a century 28
Demand and production between the west and China is crucial 29
China has been trying to move to a consumer based model 30
The west should be cautious about urging China to move to a consumer economy 31
China has learned from the recession of 2008 systemic risks 32
Too much reliance on surging economies worldwide 32
Supplier economies are particularly hard hit by this over reliance on Chinese growth 33
Trump’s protectionist threats are not helpful for the BRICS or US 33
China needs to make some crucial changes but not in a western model 33
South Africa: The late BRIC entrant with multiple economic issues 34
Mining economy problem is reducing but not being replaced 34
Cut in interest rates to desperately avoid a recession 35
Downgrades from the ratings agencies as a result of instability 35
Solutions to the problem require long term investment in people 36
Political instability is a further risk in the country 36
Unemployment needs addressing to help improve consumption and spending 37
Points of interest 38
Appendix 39
Further Reading 39
Ask the analyst 40
About MarketLine 40
Disclaimer 40