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Animated Chart: G7 vs. BRICS by GDP (PPP)
Published
2 months ago
on
July 27, 2023
By
James EagleAnimated Chart: G7 vs. BRICS by GDP (PPP)Fifty years ago, the government finance heads from the UK, West Germany, France, and the U.S. met informally in the White House’s ground-floor library to discuss the
international monetary situation at the time. This is the origin story of
the G7.
This initial group quickly expanded, adding Japan, Italy, and Canada, to solidify a bloc of the biggest non-communist economies at the time. As industrialized countries that were reaping the benefits of the post-war productivity boom, they were economic juggernauts, with G7 economic output historically contributing around
40% of global GDP.
However, the more recent emergence of another international group,
BRICS (Brazil, Russia, India, China, and South Africa), has been carving out its own section of the global economic order.
This animation from
James Eagle uses data from the International Monetary Fund (
IMF) and charts the percentage contribution of the G7 and BRICS members to the world economy. Specifically it uses GDP adjusted for purchasing power parity (PPP) using international dollars.
Charting the Rise of BRICS vs. G7The acronym “BRIC”, developed by Goldman Sachs economist Jim O’Neill in 2001, was used to identify
four fast-growing economies in similar stages of development. It wasn’t
until 2009 that their leaders met and formalized their relationship, later inviting South Africa to join in 2010.
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Russia was at the time also a member of the G7, then the G8. It was invited to join in 1997 but was expelled in 2014 following the annexation of Crimea.
While initially banded together for investment opportunities, in the last decade, BRICS has become an economic rival to G7. Several of their initiatives include building an alternate global bank, with dialogue underway for a payment system and new reserve currency.
Below is a quick look at both groups’ contribution to the world economy in PPP-adjusted terms.
| Global GDP Share | 1992 | 2002 | 2012 | 2022 |
|---|
| 1 | BRICS | 16.45% | 19.34% | 28.28% | 31.67% |
|---|
| 2 | G7 | 45.80% | 42.34% | 32.82% | 30.31% |
|---|
A major contributing factor to BRICS’ rise is
Chinese and
Indian economic growth.
After a period of rapid industrialization in the 1980s and 1990s,
China’s exports got a significant boost after it joined the World Trade Organization in 2001. This helped China become the world’s
second largest economy by 2010.
India’s economic rise has not been quite as swift as China’s, but by 2022, the country ranked third with a gross domestic product (PPP) of
$12 trillion. Together the two countries make up nearly one-fourth of the PPP-adjusted $164 trillion world economy.
The consequence of using the
PPP metric—which better reflects the strengths of local currencies and local prices—is that it has an outsized multiplier effect on the GDPs of developing countries, where the prices of domestic goods and services tend to be cheaper.
Below, we can see both the nominal and PPP-adjusted GDP of each G7 and BRICS country in 2023. Nominal GDP is measured in USD with market-rate currency conversion, while the adjusted GDP uses international dollars (using the U.S. as a base country for calculations) which better account for cost of living and inflation.
| Country/Group | Membership | Nominal GDP (2023) | PPP GDP (2023) |
|---|
| 1 | U.S. | G7 | $26.9T | $26.9T |
|---|
| 2 | Japan | G7 | $4.4T | $6.5T |
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| 3 | Germany | G7 | $4.3T | $5.6T |
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| 4 | UK | G7 | $3.2T | $3.9T |
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| 5 | France | G7 | $2.9T | $3.9T |
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| 6 | Italy | G7 | $2.2T | $3.2T |
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| 7 | Canada | G7 | $2.1T | $2.4T |
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| 8 | China | BRICS | $19.4T | $33.0T |
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| 9 | India | BRICS | $3.7T | $13.0T |
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| 10 | Brazil | BRICS | $2.1T | $4.0T |
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| 11 | Russia | BRICS | $2.1T | $5.0T |
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| 12 | South Africa | BRICS | $0.4T | $1.0T |
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| 13 | G7 Total | $46.0T | $52.4T |
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| 14 | BRICS Total | $27.7T | $56.0T |
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By the IMF’s projections, BRICS countries will constitute more of the world economy in 2023 ($56 trillion) than the G7 ($52 trillion) using PPP-adjusted GDPs.https://www.visualcapitalist.com/cp...ificant influence financially and politically.
