A recent analysis by SBI Research reveals that the combined GDP share of the six proposed new members of the BRICS grouping—Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates—amounts to just 11%. Among them, Saudi Arabia holds the highest contribution at 4%. The inclusion of these countries is expected to raise the global GDP share of the existing BRICS nations (Brazil, Russia, India, China, and South Africa) from 26% to 30%, while their population share would reach 46%. The decision for expansion was announced during the last BRICS summit in Johannesburg, with implementation scheduled for January 1, 2024.
Currently, China’s GDP share in BRICS stands at 70%, but it is projected to decrease to 62%, while India’s share will slightly drop from 13% to 12%. South Africa’s contribution will decrease by 50% to 1%, while Brazil’s stake will remain unchanged. Russia’s share is set to decrease by 7%. The analysis also highlights the trading relationships between India and the new member countries, with the UAE being India’s largest trading partner.
The report predicts that the combined GDP of the BRICS+6 economies will increase by 11%, accounting for 4% of the global GDP in 2022, ultimately contributing to the BRICS+6’s overall share reaching 30%. Despite the expansion, China and India will continue to represent 74% of the bloc’s total GDP. The report also notes the impact on global oil production, with the BRICS+6’s share rising from 18% to 40%, and their portion of oil consumption increasing from 27% to 36%.
Furthermore, the report suggests that the new members’ share of global foreign exchange reserves would rise to 45% and their shares in global merchandise trade and services trade would expand to 25% and 15% respectively, from the current 20% and 11%. The addition of these new members, particularly Saudi Arabia, with its significant oil reserves, could potentially influence the payment system and price discovery in the oil market.