The COVID crisis has led to significant economic losses and made the social fabric of the BRICS countries fragile by amplifying unemployment, poverty, gender disparity and migration risks, according to the BRICS Economic Bulletin released on Friday.
The Reserve Bank of India released bulletin prepared by the BRICS Contingent Reserve Arrangement (CRA) Research Group with members from BRICS central banks. India is the current chair of the BRICS.
The CRA Research Group was set up to enhance research, economic analysis and surveillance capacity of the BRICS.
The BRICS grouping comprise Brazil, Russia, India, China and South Africa.
The bulletin said the COVID crisis has indiscriminately affected all countries, adding that the BRICS were no exception as they have also been seriously hit by the pandemic and are trying to recover from it.
However, there is a significant heterogeneity among the BRICS in the duration and intensity of the pandemic.
“While China could largely contain the spread of the debilitating infection, other BRICS countries have witnessed multiple waves of infection,” it said.
The COVID crisis has led to significant economic losses and made the social fabric of the BRICS fragile by amplifying unemployment, poverty, gender disparity and migration risks, the bulletin noted.
As per the bulletin, there is convincing evidence of a recovery of the BRICS from the deep, pandemic-induced contraction in 2020. However, the recovery shows significant divergence amongst the BRICS members.
“China has been able to control the infections effectively which has aided its quick recovery. While the pace of economic growth is gradually picking up in India and Brazil, Russia and South Africa are yet to return to their pre-pandemic levels of economic activity,” it said.
Further, the bulletin said that since the threat of COVID remains unabated in the BRICS, it is difficult to estimate the robustness of this recovery.
The bulletin addresses the theme of ‘Navigating the Ongoing Pandemic: The BRICS Experience of Resilience and Recovery’ covering the economic recovery and its divergences, inflation risks, external sector performances, financial sector vulnerabilities and other macroeconomic risks.
“Going forward, the pace and efficacy of vaccination is going to be the most important determinant of economic recovery,” it said.
According to the bulletin, if the growth momentum in the BRICS countries, especially in China, slows down, global recovery could also see further headwinds to its growth momentum.
Apart from the uncertainty from COVID, tightening of global financial conditions and persistent economic and structural changes arising from the crisis are other factors engendering concern in the BRICS countries, it said.
The bulletin also said that BRICS countries should seize the opportunities that might emerge amid the crisis by planning for and working towards a bright post-pandemic future.
Over the years, the bulletin said the BRICS countries have established strong foundations of co-ordination and co-operation in the form of the New Development Bank (NDB) and the CRA.