BRICs to account for 40% of world growth by 2020: E&Y

BRIC nations -- Brazil, Russia, India and China -- are likely to contribute 40 per cent of global economic growth in the next 10 years due to a "tectonic shift" in the distribution of global capital over the next decade, global consultancy firm Ernst & Young said.

"Companies and governments in the developed world have to face up to the reality that there will be a further shift in the economic balance of power in the years ahead," Mark Otty, Area Managing Partner (Europe, the Middle East, India and Africa) at Ernst & Young said.

In the latest research note titled 'For Richer, For Poorer Global Patterns of Wealth', Ernst & Young said emerging economies have seen their share of global output and wealth rise significantly over the last few years, driven by faster growth, rising income, high savings ratios, strong investment and export.

In the next decade, the BRIC countries are likely to contribute 40 per cent of global growth, while the US would account for around 14 per cent.

China is set to become the biggest economy in the world in public-private partnership terms by 2019 and by 2020 the BRIC countries would account for almost a third of global GDP -- of which China will contribute 18 per cent.

E&Y projects that the BRICs would account for 65 per cent of global basic metals output by 2020 and here also China would account for the lion's share of growth.

According to the report, around 77 per cent of world reserves, totalling almost $7 trillion, are held by emerging markets. Besides, cross-border private investment by emerging economies has been increasing as well.