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26 Feb, 2024 13:01

Major shifts happening in global economy – Russia’s finance minister

Sanctions are a tool used by the “slowing” West to stall the growth of developing countries, Anton Siluanov has said
Major shifts happening in global economy – Russia’s finance minister

The global economy is changing as developing countries are now rapidly outpacing the major advanced economies of the West, Russian Finance Minister Anton Siluanov said in an interview with RIA Novosti published on Monday.

He referenced economist and billionaire hedge fund manager Ray Dalio, who has said that “history rhymes” and that the configuration of the world economic order frequently changes as countries that are “slowing down” are overtaken by those whose economies are growing. 

“Now the situation is absolutely the same, truly a turning point, when countries with developing economies have already overtaken the G7 countries in terms of growth potential... The rapid development of emerging economies confirms that the world is undergoing a global economic shift,” Siluanov stated.

The minister warned, however, that such transformations are often fraught with difficulties and are never “painless.” Advanced economies, he argues, are using sanctions to stall the growth of those countries that are ascendant.

“We see the restrictions and sanctions they are trying to restrain China and Russia with – these are the consequences of a paradigm shift,” Siluanov emphasized.

Although Russia has faced an unprecedented number of Western restrictions since the start of the Ukraine conflict two years ago, its economy has demonstrated resilience, the minister said, pointing to growth of GDP (3.6%), industrial production (3.5%), and household incomes (5.4%). Siluanov noted that the side effect of the sanctions has been that they have backfired on the states that imposed them.

This year saw a groundbreaking expansion of the BRICS group of developing economies, which was joined by Saudi Arabia, Iran, Ethiopia, Egypt, and the United Arab Emirates. Following the expansion, the BRICS states have overtaken the G7 in terms of their share in global GDP in PPP terms at 36.6% to 29.4%, according to calculations by the IMF.

Dilma Rousseff, the head of the BRICS-focused New Development Bank, forecasts that this gap will only grow further, with BRICS’ share topping 40% by 2028, while that of the G7 will decline to 27.8%.

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