How have the Bric economies withstood the global slowdown and what are the prospects of an early recovery? An answer to this question is difficult in the context of the continued uncertainty of global growth, as indicated by the fourth consequent revision of the global growth forecasts by the IMF over the last seven months since July 2008.

And all numbers point to a sharp worsening of the scenario in 2009 as compared to the previous year. While the four revisions for 2008 reduced the global growth by only 0.7 percentage points, from 4.1% in the July 2008 estimate, to 3.4% in the January 2009 estimate; the 2009 figures went down by 3.4 percentage points from 3.9% to 0.5% over the same period. The only reason for solace is that the IMF estimates that global growth will bounce back, albeit at a slower pace to 3% in 2010.

One favourable aspect that stands to benefit the Bric economies is that the slowdown is expected to dent the developed economies rather than the emerging and developing economies. GDP growth forecasts for advanced countries in 2008 have been revised down from 1.7% to 1.5% to 1.4% and now finally to 1%. In contrast, the impact of the global slowdown has been rather benign on developing economies where four consecutive forecasts have brought down growth from 6.9% in the first two to 6.6% in the third and finally down to 6.3% in the last. Thus, while the forecasts have revised down advanced country GDP growth in 2008 by 0.7 percentage points, that of developing countries has been pulled down by only 0.6 percentage points on a much higher base.

What is however surprising is that the impact of the slowdown in 2008 has been very divergent across the four Bric countries. While the 2008 slowdown dragged down growth in three countries, Brazil, the fourth, seemed to have successfully evaded the recession, with its global growth even picking up by 0.6 percentage points to 5.8% in 2008.

Among the Bric countries where growth decelerated in 2008 the least affected was China where growth has been revised down by just 0.1 percentage points to 9.6% over the four estimates.

In sharp contrast, the growth estimates for Russia has been revised down the most by 1.5 percentage points to 6.2% in January 2009, down from 7.7% in the July 2008 forecast. Indian losses were just about half with the 2008 growth figures being revised down by 0.7 percentage points from 8% in July 2008 to 7.3% in January this year.

The growth prospects for 2009 are however much more diverse. While GDP growth in developed economies are expected to take a hit with the economy contracting by 2% as against the 1% growth clocked in 2008, the growth in the developing economies are almost to be halved from 6.3% in 2008 to 3.3% in 2009. In nominal terms this would mean that the output in developed economies will decline by $762 billion in 2009, while that of the developing countries would move up by $444 billion.

The Bric countries would contribute about three-fourths of the gains of the developing economies with China, India and Brazil together boosting global output by $295 billion in 2009.

But despite these gains the GDP growth in China, India and Brazil will slow down to 6.7%, 5.1% and 1.8%. However, the Russian economy will follow the growth path of the advanced economies with its output declining by 0.7% or around $8 billion.

And now what about the recovery prospects in 2010? The IMF forecasts wide disparities across the country groupings. The first projections show that the growth in 2009 will bounce back by more than 3 percentage points to 1.1% in the advanced countries, marginally higher than the 1% growth in 2008. The pick up in the developing countries is, however, expected to be milder with the growth number picking up by just 1.7 percentage points to 5% in 2010, much lower than the 6.3% growth clocked in 2008.

The slower pick up in the developing countries in 2010 is also expected to influence growth in the Bric economies. While the pick up would be the highest in the worst-hit Russia with the numbers climbing up by 2 percentage points to 1.3% in 2010, the least pick up would be in China where growth would accelerate by 1.3 percentage points to 8%. The pick up in Brazil and India would be broadly similar. While the growth figures in Brazil will go up by 1.7 percentage points to 3.5%, that of India would go up by 1.4 percentage points to 6.5%.

p.raghavan@expressindia.com