Star of the BRICS countries consisting of Brazil, Russia, India, China and South Africa began to fade. The rating of the BRICS, which due to high growth rates since 2001, was considered the engine of the global economy, and after the global crisis in 2008 growth slowed and was again demoted.
Following Russia and Brazil, South Africa too lost their investment grade rating. Standard&Poor’s, citing as reason the political uncertainty in the country, downgraded the rating to “BB+”. And the forecast was marked as “negative”.
And it shows that the rating could be downgraded again. For the first time in 17 years South Africa rating fell below investment grade.
Fitch retains rating of South Africa at the last stage of investment grade, and Moody’s — in the second stage.
Turkey is not alone
The drop in the credit ratings of these countries are relatively comparable with Turkey, indicates that not one Turkey facing the same problem. In BRICS countries, unshakable ranking remained only China and India.
India, starting in 2014, often criticized Moody’s and Standard&Poor’s, which maintain its credit rating at “BBB-“, in spite of the progress made by the country in terms of economic growth and stability.
And the rating of Brazil and Russia was downgraded to junk level in 2015. Moscow have lost their investment grade rating because of its political role in Syria and fluctuations in raw material prices.
Brazil is faced with the downgrade after President Dilma rousseff (Dilma Rousseff) was removed from power in a coup. Turkey lost its investment rating on January 27 of this year.
Fitch downgraded Turkey’s rating from “BBB-” to “BB+” and assigned a “stable” Outlook. And on March 18, Moody’s changed the Outlook on the rating “Ba1”, one notch below investment grade, from “stable” to “negative”.
The credit rating of Turkey by S&P — “BB”, two notches below investment grade, the forecast — “negative”.
The creation of your Agency
At a meeting in India in October 2016, the BRICS countries decided to establish its own rating Agency that will develop specific standard of evaluation. And the New development Bank (NDB), established jointly by the BRICS, with a capital of $ 50 billion officially commenced its activities in July 2015 in Shanghai. It is assumed that the NDB capital will reach $ 100 billion.
Growth leads India
The population of the BRICS countries, the emerging economies of the world, is more than 40% of the world population. According to the forecast of PricewaterhouseCoopers by 2030, China will become the largest economy in the world. India will be the third. In 2016, India’s economy grew by 7.4%, China — 6.7%. Growth in Africa remained at the level of 0.28%. While the Turkish economy grew by 2.9%, the Brazilian economy shrank by 3.6%. The reduction of the Russian economy in 2015 was 3.7%.