The emergence of BRICS economies in recent years poses both opportunities and risks for the global economy, which needs to be carefully monitored, a government report said Monday.

The report by the finance ministry said the economies of Brazil, Russia, India and China as well as South Africa, which joined the ranks of the other large, rapidly growing countries this year, have contributed to a surge of the global middle class and reduced disparity between haves and have-nots among nations.

Consumption among these countries grew an average of 12.7 percent annually since 2000 with imports jumping 17.9 percent in the same timeframe.

“These countries have some 800 million middle-class people, exceeding the 700 million people living in the Group of Seven most industrialized economies in the world,” the latest findings said.

It claimed that at present pace the number of middle-class people in BRICS countries may reach 1.6 billion in 2020.

The ministry also said that BRICS countries have contributed significantly to so-called trade between South-South or developing economies in the face of a drop in demand from advanced industrialized nations in North America, Europe and Japan.

Trade between South-South countries grew by around 30 percent annually from 1999 through 2009, which created new markets for exporters.

On the negative side, the ministry in charge of the country’s economic policies said BRICS countries are exposed to asset bubble risks that could spark a global financial crisis like the one that seriously hurt growth in late 2008 and 2009.

“These countries need to prepare for the possibility of a sudden outflow of capital in a relatively short period of time that can cripple economies,” it said, adding a safety mechanism needs to be in place to cope with unexpected developments.

Besides asset bubble risks, the ministry said, solid economic growth by BRICS is fueling international commodity prices that can exert inflationary pressure down the road.

“There is a structural link between the higher raw materials and energy prices and rise in demand from emerging economies,” it said.

Such developments, it said, can make it hard for many other countries to control inflation that can affect economic stability that is vital for sustained growth. 

(Yonhap News)