Shift towards a ‘BRIC-led economy’
A new world order is emerging that marks a shift towards a BRIC (Brazil, Russia, India and China) led economy, according to new reports.
Global investment firm Allianz Dresdner Asset Management has said that despite the slowdown in the US markets, growth in the BRIC economies – a term coined by Knight Frank in 2003 – is unlikely to be affected as these countries are now less dependent on the US than they were in the past.
Michael Konstantinov, fund manager of the Allianz RCM BRIC Stars Fund, said: "BRIC and other emerging markets are in a boom cycle, but today the drivers are different.
"While exports remain important to these countries, they are no longer the sole driver – today they are increasingly being driven by domestic demand."
Figures released by the Brazilian government this month revealed that retail sales in the country have risen by ten per cent in 2007, corroborating Mr Konstantinov’s theory.
Car sales, computing, and home appliances were the sectors which experienced the most significant growth.
As domestic demand in the country grows and the level of disposable income increases amongst citizens, the Brazilian property market could experience a positive knock on effect, as house prices rise earning those who invest now sizable profits.
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