US Conference Board fears BRICS miracle over as world faces decade-long slump

The Telegraph ^ | 11/13/2012 | Ambrose Evans-Pritchard

[bruinbirdman]

The catch-up boom in China, India, Brazil is largely over and will be followed by a drastic slowdown over the next decade, according to a grim report by America’s top forecasting body.

Europe's prognosis is even worse, with France trapped in depression with near zero growth as far as 2025 and Britain struggling to raise its speed limit to 1pc over the next three Parliaments.

The US Conference Board’s global economic outlook calls into question the "BRICs" miracle (Brazil, Russia, India, China), arguing that the low-hanging fruit from cheap labour and imported technology has already been picked.

China’s double-digit expansion rates will soon be a romantic memory. Growth will fall to 6.9pc next year, then to 5.5pc from 2014-2018, and 3.7pc from 2019-2025 as the aging crisis hits and investment returns go into "rapid decline".

Growth in India - where the reform agenda has been "largely derailed" - will fall to 4.7pc to 2018, and then to 3.9pc. Brazil will slip to 3pc and then 2.7pc. Such growth rates will leave these countries stuck in the "middle income trap", dashing hopes for a quick jump into the affluent league.

"As China, India, Brazil, and others mature from rapid, investment-intensive ‘catch-up’ growth, the structural ‘speed limits’ of their economies are likely to decline," said the Board.

The fizzling emerging market story is a key reason why the West has relapsed this year. The world is now facing a synchronized downturn all fronts, with little scope for fiscal and monetary stimulus.

"Mature economies are still healing the scars of the 2008-2009 crisis. But unlike in 2010 and 2011, emerging markets did not pick up

[gleeaikin]

Too much STUFF chasing too few buyers.

[bruinbirdman]

"Too much STUFF "

ChiCom overcapacity in cement is said equal what rest of the world produces.

yitbos

[WILLIALAL]

“Too much STUFF chasing too few buyers.”

Looks like long term deflation is in store for us.

[Lancey Howard]

BUMP

[GeronL]

Any sign of success is stamped out by socialists and government. Remember how Ireland had a boom? They sure knew how to kill that.

[bruinbirdman]

"Too much STUFF chasing too few buyers"

Chevy Volt.

"Looks like long term deflation is in store for us"

Bankruptcy

yitbos

[cunning_fish]

In fact China has a chance. They may start their domestic war on poverty and reconfigure for a home market. Thus, it may require a sighnificant change to political system and will also lead to growing a labor cost.
If i were China I could try. In any way modern China looks a lot like 1930s Japan to me. We have to watch out!

[Little Pig]

The assumption in the OP is that everything will remain the same. At least here in India, even if reforms are off the rails, they can be put back on. It it getting more likely that there will be a pretty significant upheaval in the gov here in 2014, and there is always the chance that pressures on the current administration could push them to give the needed reforms a second look. India is the least sclerotic of the four/five, and has the most fluid government. To make assumptions of that magnitude even five or six years out about their growth is kind of foolish.

[blam]

" To make assumptions of that magnitude even five or six years out about their growth is kind of foolish. "

I agree and believe that India's long term economic picture is brighter than Chinas.