Illustrating the BRICS Expansion

BRICS represents a coalition of five prominent countries—Brazil, Russia, India, China, and South Africa. Recognized for their emerging economies, the alliance aims to enhance diplomatic collaboration, reform global financial institutions, and act as a counterbalance to Western hegemony.

On August 24, 2023, BRICS declared its formal acceptance of six new members, effective from the beginning of 2024: Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the United Arab Emirates (UAE).

Share of Global GDP

As most of the new BRICS members are considered developing economies, their inclusion in the group is not anticipated to significantly impact its overall share of GDP.

The subsequent table outlines GDP projections for 2023, sourced from the IMF.

The original six BRICS members are projected to have a combined GDP of $27.6 trillion in 2023, constituting 26.3% of the global total. With the inclusion of the new members, the expected GDP slightly increases to $30.8 trillion, representing a 29.3% global share.

Global Population Share

BRICS has consistently constituted a substantial portion of the global population, primarily owing to the significant populations of China and India, both surpassing 1 billion people.

The inclusion of Ethiopia (126.5 million) and Egypt (112.7 million) adds two of the largest populations to BRICS. Refer to the table below for population data sourced from World Population Review, dated as of 2023.

Oil Production Share

Despite global efforts to transition away from fossil fuels, the global oil market remains substantial, and BRICS is poised to assume a more significant role in it. This shift is largely attributed to the inclusion of Saudi Arabia, contributing a significant 12.9% to global oil production.

According to 2022 data from the Energy Institute Statistical Review of World Energy, BRICS' share of oil production is expected to increase from 20.4% to 43.1%.

Who Else Is Coming?

As per Reuters, the interest in joining BRICS extends to over 40 countries. However, a more limited group of 16 countries has officially applied for membership. Among them are Algeria, Cuba, Indonesia, Palestine, and Vietnam.

With the expansion of the group, potential differences in opinions and priorities among members may give rise to tensions in the future. Notably, India and China have faced numerous border disputes in recent years, and Brazil's newly elected President has expressed a desire to "kickstart a new era of relations" with the U.S.

While uncertainties loom, one certainty is that a new acronym for the group will be necessary in the near future.

As the BRICS nations continues to expand, the concern remains around the dollars dominance as the worlds reserve currency.

De-dollarization is evident in FX reserves, where the dollar’s share has declined to a record low of 58%.” - Meera Chandan, Co-Head of Global FX Strategy, J.P Morgan