The past decade was all about the BRICs, the massive economies of Brazil, Russia, India and China, which kicked off at the beginning of the new century, boomed and are now slowing like the rest of the developed world. Taking their place is a new group of fast-rising economies promising businesses outsized returns.
The next decade could belong to the CIVETS – Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa – whose rising middle class, young populations and rapid growth rates make the BRICs look dull in comparison.
Hardly emerging economies anymore – China is the world’s second largest economy and Brazil will take seventh place this year – that their pace would slow down was inevitable.
Now more connected by trade to the developed economies, the BRICs are feeling the same slowdown effects as the developed economies. And, in the case of China and Brazil, they are also wrestling with the strains of their rapid ascensions. Real estate bubbles, currency control issues and hyper-wage inflation are sending global companies elsewhere for growth.
Brazil is forecast to grow a mere 3% this year. China, while still targeting a strong GDP growth rate of 7-8% in 2012, is well off its double-digit rates of the past decade. Russia, meanwhile, which can’t kick its dependency on oil exports and endured the retrograde re-election of Vladimir Putin, may grind out 3.2% growth this year. India is also slowing, with a GDP target of 6.9% growth in 2012, a sharp decline from its 2010 pace of 9.6%.
The CIVETS, meanwhile, are at the lift-off point…
Keep reading – The decade of the CIVETS