The latest prediction from the Economist Intelligence Unit (EIU) has the Brazilian economy hitting a GDP of $2.44 trillion by the end of the year compared with the UK’s $2.43 trillion.
Last year saw Brazil, one of the BRIC countries (Brazil, Russia, India and China), overtake Italy to take seventh place and it now looks increasingly certain that the UK will be the next holder of the lucky number 7 title, albeit on the way down.
EIU’s chief economist on Brazil, Robert Wood, puts this down to Brazil fulfilling China’s need for certain commodities. Brazil experienced good prices for iron ore for example during China’s meteoric economic rise. Then there’s Brazil’s significant oil and gas fields.
Brazil managed to weather the financial storms of 2008 and grew by 7.5% last year. The EIU expects this to moderate to 3% this year and 3.5% in 2012, which compares to the stagnant economy of the UK
By 2020 though says the EIU Brazil will have overtaken even Germany to become the fifth largest economy in the world leaving the UK trailing by then in ninth place. Germany will be sixth, Russia seventh and France eighth.
This is a good time to be on the rise as the country will be hosting the FIFA world Cup in 2014 and the Olympic Games two years later in 2016.
The projections by the EIU add to the claims by PricewaterhouseCoopers (www.latinbusinesschronicle.com/app/article.aspx?id=4715) earlier this year, which said that the UK would lose out to Brazil on purchase parity terms by 2013 but that France would succumb this year. PwC has Brazil at the number four slot by 2050.
This will of course by pounced on by the Labour Party. But it should be remembered that there is actually little difference in real terms between what the coalition are doing and what Labour would really do if they were in power. On the projections it would just be a matter of timing as to when Brazil overtakes the UK.
There is also the matter of GDP per head. Brazil has a population of some 192 million to share its wealth amongst compared to the UK’s 62 million, this puts Brazil at 54th on the world rankings whereas the UK stands at a not too impressive 22nd according to Wikipedia.