In the last two weeks, there have been efforts in foreign trade to make less use of American currency. So, the GDP and possible currencies of the BRICS countries pose the most significant threat yet to the US dollar’s dominance.
The GDP (PPP) of the BRICS group, comprised of Brazil, Russia, India, China, and South Africa, had officially passed that of the G7. The change comes when the countries work hard to make their own money.
An Emerging Market Century?
The BRICS are a larger share of the Global economy than the G7. pic.twitter.com/AyEIx2TwTO
— Richard Dias (@RichardDias_CFA) March 9, 2023
BRICS Countries GDP Pose Danger to USD
The BRICS countries are making more and more attempts to stop the US dollar from being the most crucial currency in the world. This is well known. So, Luiz Inacio Lula da Silva, the president of Brazil, has lately said that he wants the American dollar to be replaced. On the other hand, recent events show that hope could become a possible truth.
The most significant danger to the US dollar comes from the GDP of the BRICS countries and their work to make their currency. Acorn Macro Consulting said that the group’s gross domestic product (GDP) is now higher than that of the G7 countries based on purchasing power parity.
The United States, Canada, the United Kingdom, France, Italy, Germany, and Japan are all part of the G7. On the other hand, about 41% of the world’s people live in the five BRICS countries, which are responsible for 16% of foreign trade. So, the BRICS countries now make up almost 31.5 percent of the world’s GDP. On the other hand, only 30.7% of the money comes from the G7 countries. They are clearly showing how the balance of power is changing.
Still, what Da Silva said shows that this fact drives alternative money creation. “Why can’t an organization like the BRICS bank have a currency to fund trade between Brazil and China and between Brazil and all the BRICS countries?” he asked. Also, he asked, “Who decided that the dollar would be the trade currency after the gold parity ended?”
“We need a currency that gives countries more peace of mind because, right now, if a country wants to export, it has to chase the dollar when it could export in its currency,” Da Lula said. These different parts coming together could be a great chance. Also, BRICS’s international power and clear goals could soon lead to a new trade currency.