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O’Neill says BRICS can avert global recession
May 9, 2013, 10:41 am

[IMF Staff Photo/Stephen Jaffe]

Jim O’Neill has dismissed fears of a downturn of the Chinese economy [IMF Staff Photo/Stephen Jaffe]

Former Goldman Sachs chairman Jim O’Neill has said that rapid development of the BRIC countries have exceeded his expectations.

“The BRIC countries have the potential to avert a global recession and to grow faster than the rest of the world and to pull all of us along with them as a (growth) engine,” said O’Neill in an interview to Xinhua.

The former Goldman Sachs chief also asserted that China should push forward the internationalisation of the Renminbi.

He said London, as a global financial centre, will see increasing trade in RMB in the future, “so long as the European regulators are wise enough”.

O’Neill, who is famous for coining the acronym BRICs, has repeatedly said that the BRICs and other emerging markets will continue to be an increasingly important driver of global growth.

He also dismissed fears of a downturn of the Chinese economy.

“The reasons for China’s lower growth rate were structural and cyclical in nature. It was a planned downturn, mainly due to concerns about overheating and inflation. During the last quarter China already did better again, coming out of its trough,” O’Neill noted.

The former Goldman Sachs chairman forecast China’s growth for the decade at 7.5 per cent.

China’s economic growth mode is expected to gradually turn to be more oriented by domestic demand, with demand for fossil energy dropping while renewable energy rising, noted O’Neill.

“If China grows by 7.5 per cent in this decade, and if the developed world returns close to trend, then the world will grow by around four per cent,” he predicted recently.

The economist, who had earlier cast doubts about the BRICS membership of South Africa due to the size of its economy, changed his stand last month by saying, South Africa “has a big role to play [within the grouping] and probably quite a responsibility in being some kind of genuine gateway to helping the rest of Africa become more successful”.

The BRICS Post