Bad bets on BRIC?
It is well known that these four countries are struggling, with growth far below its level during the boom
Goldman Sachs chief economist Jim O’Neill coined the acronym BRIC in 2001, to denote the four countries he thought were ready to grow rapidly: Brazil, Russia, India and China. Now another expert from the same investment bank has said that investors are paying the price for betting too heavily on these markets. Sharmin Mossavar-Rahmani has hinted the BRIC craze was a mistake.
It is well known that these four countries are struggling, with growth far below its level during the boom. The original research paper selling the BRIC idea also assumed that the currencies of these countries would appreciate; other than China, these currencies are losing value.
Is this the end of the great emerging markets story? Unlikely, since their average incomes will continue to close the gap with those in the West. However, such convergence will be slower than what most expected even five years ago.
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