With the headwinds facing the BRICS intensifying to an unprecedented degree this year, the bloc is exploring the potential modalities of a joint response to the challenges of rising protectionism and risks of economic slowdown. At the same time, the global economic backdrop is becoming increasingly precarious, with projections for growth in the world economy scaled down by international organizations – the IMF projects global growth at 3% in 2025 (vs. an estimate of 3.3% in the beginning of this year), well below the average of 3.7% in the 2000-2019 period[1]. At this critical juncture for the world economy, the BRICS could explore the potential modalities of a coordinated stimulus that would support growth across the Global South and the broader world economy via an array of policy measures, including mutual trade liberalization.
Greater policy coordination, particularly in the macroeconomic policy sphere has been one of our key focus areas in the past several years, with calls to explore the modalities of joint economic stimulus being raised back in 2024[2]. The current conditions in the world economy are rendering such calls even more topical and pressing. Indeed, as of mid-2025 nearly all BRICS-5 economies are experiencing a slowdown in 2025 compared to 2024 – for Brazil growth is projected by the IMF to decline from 3.4% in 2024 to 2.3% in 2025; for China the corresponding figures for 2024 and 2025 are 5.0% and 4.8%; India’s economy is expected to decelerate from a growth of 6.4% in 2024 to 6.3% in 2025; for South Africa growth is to reach 1% after similar low growth performance in 2024, while in Russia after growth rates of 4.3% in 2024, GDP is set to post a rise of 0.9% in 2025[3]. All these estimates arguably do not fully take into account the recent escalation in US pressure on BRICS economies in the trade sphere.
On the monetary policy side the conditions for greater stimulus appear to be largely aligned across the BRICS-5 economies, where in some of the cases (Russia, Brazil) policy rates have peaked at long-time highs. In Russia, the onset of the rate reduction cycle this year has already resulted in the key policy rate being brought down from 21% in April to 18% in July, which is likely to be followed by further easing in view of the gradual moderation in inflationary pressures (8.8% in July after nearly 10% in May 2025)[4]. Brazil’s Central Bank left the policy rate unchanged at a high of 15% in July 2025, with recent inflation figures pointing to a deceleration in price growth[5]. An important factor in terms of the timing of the BRICS monetary stimulus is the increasing possibility of US rate cuts that are expected by the markets later this year[6], which should create more scope for the monetary easing in emerging markets.
This year also presents a unique opportunity to render BRICS economic policy coordination more geared towards green and sustainable development as South Africa (a BRICS member) is chairing the G20 forum, while Brazil holds the presidency in BRICS as well as the COP conference. One of the ways to achieve this would be to consolidate the COP commitments for BRICS as well as the G20 economies and express them in terms of the “green economic stimulus” that they deliver to the global economy as part of a broader range of measures directed at boosting global economic growth. In other words, BRICS as a bloc led by its two core members, South Africa and Brazil (both members of the G20 Troika), could coordinate the incorporation of the COP commitments and initiatives into a “green stimulus” for the Global South and the world economy.
The modalities of coordinated stimulus undertaken by BRICS could include a wide array of measures, ranging from structural measures to fiscal and monetary policy measures, with the resulting BRICS stimulus package potentially encompassing:
- Trade liberalization: apart from the measures that we mentioned recently[7] such as the formation of a bloc within the WTO and the creation of a platform for regional integration arrangements, there may be the simpler route of exchanging import tariff reductions of 5-10% within the BRICS/BRICS+ circle (this, however, may still call for coordination among the respective regional integration arrangements that in many cases are in charge of national trade policies)
- An inventory of barriers in South-South trade (particularly among the core BRICS economies), with a discussion on which of these restrictions are to be eliminated
- Structural measures: easing of conditions for mutual investment among BRICS economies; measures to expand technological exchange to boost productivity growth; measures to liberalize labor migration flows to relieve labor shortages in some of the BRICS core economies
- Monetary stimulus: it does not necessarily have to rely exclusively on the reduction in the key policy rate, but may also involve a reduction in reserve requirements or other monetary policy measures;
- Fiscal policy stimulus: in line with earlier such efforts in China and some of the leading advanced economies, the composition of the fiscal stimulus should target those segments that may deliver the highest returns in terms of productivity growth (digital economy), while also according due priority to the support household consumption and the social safety net.
In terms of the sources of financing, the effects of budget spending could be amplified via investment from the development institutions and investment platforms across BRICS+. The latter may include the financing from the New Development Bank, the regional development banks, the regional financing arrangements (RFAs), the national development banks as well as the Sovereign Wealth Funds (SWFs) of BRICS economies. There may also be contributions coming from the BRICS CRA and the BRICS Multilateral Guarantee (BMG) initiative once these platforms are fully operational.
The propagation of such a stimulus across not just the BRICS core, but also the BRICS+ circle could be reinforced via the participation of regional integration arrangements and regional development institutions. Such a BRICS coordinated stimulus would then be superior to the G20 stimuli that have been undertaken back in 2008 and 2020 without the significant employment of such a regional multiplier. Another consideration is to amplify the positive spillovers from the BRICS stimulus to global demand – for example, the trade liberalization measures could be rendered open-ended with respect to other economies and regional blocs in case such trade liberalization is reciprocated. This in turn has the potential to also render the spillovers to global demand stronger from the monetary and fiscal policy stimuli that “leak” to the rest of the globe via higher imports.
The implementation of the BRICS stimulus would also need to be phased, with the first stages being reserved for trade liberalization, followed by coordination in the macroeconomic policy mix of monetary and fiscal policies, with further stimuli to come at later stages via coordinated structural measures. Greater reliance on the co-financing of projects from the New Development Bank and regional development institutions may be frontloaded within the package, with greater financing coming from the BRICS CRA and the BRICS Multilateral Guarantee (BMG) in the later stages of the stimulus package implementation as these two financing instruments are yet to be fully developed.
There are undoubtedly significant constraints and limitations that BRICS economies face in attempting to roll out a joint economic stimulus package. One key barrier is the lack of experience in BRICS/BRICS+ macroeconomic policy coordination. On the fiscal side, there are tangible constraints for launching a stimulus due to high fiscal gaps and debt levels – Brazil is projected by the IMF to register public debt (general government gross debt) levels of 91.6% of GDP by the end of 2025 and close to 99% of GDP by 2029[8]. In trade, there is yet no BRICS+ platform for regional integration arrangements or a bloc within the WTO – these should be seen as a pre-condition for policy coordination in the sphere of international trade. Nonetheless, even simulation exercises of the potential modalities and scenarios of coordinated stimulus conducted in the context of current unfavorable conditions would go a long way towards rendering BRICS economies more prepared in jointly dealing with the next waves of global economic adversity.
On the whole, the BRICS stimulus will need to focus not only on addressing the near-term needs to boost growth, but also on correcting some of the longer term imbalances. In particular, the stimulus will need to address the issue of high levels of income inequality across BRICS via prioritizing programs of financial and digital inclusion. Priority also needs to be accorded to the support of SME activity as well as youth employment programs via active labour market policies. Perhaps one of the most promising segments of a BRICS economic stimulus package may be support for affordable housing – this may deliver important benefits in terms of improving social conditions, lowering inequality and generating some of the highest multiplier effects for growth (in line with the indications of input-output Leontieff tables[9]). There is also scope for integrating the COP and BRICS initiatives into a combined “green stimulus package”, to render future growth within BRICS+ more sustainable.
In the end, the response coming from BRICS to mounting protectionism in the world economy needs to go beyond the simple tit for tat arithmetic, but should rather seek a different, far broader ambition that strengthens BRICS credentials as an economic bloc that supports international economic organizations such as the WTO and that can be an effective driver of greater openness and economic stimulus during periods of increasing volatility and recessionary risks in the global economy. The current challenges faced by BRICS could be turned into an opportunity to forge greater cohesion and policy coordination. A coordinated stimulus exercise even if not implemented but only analyzed and discussed within the BRICS+ circle would prepare the groundwork for a more effective coordinated response to global challenges in the future.
[1] https://www.imf.org/en/Publications/WEO. There is a question as to whether the IMF forecast for global growth fully incorporates the current volatility factor in international trade policy dynamics, including the possibility of some of the hastily concluded trade deals falling apart.
[2] https://brics-plus-analytics.org/the-brics-macroeconomic-policy-mix/; https://brics-plus-analytics.org/on-brics-policy-coordination/
[3] https://www.imf.org/en/Publications/WEO
[4] https://interfax.com/newsroom/top-stories/112722/#:~:text=According%20to%20Rosstat%20data%2C%20inflation,from%209.88%25%20to%209.4%25.
[5] https://www.reuters.com/world/americas/brazils-inflation-undershoots-forecasts-july-amid-high-interest-rates-2025-08-12/
[6] https://www.thehindu.com/business/Economy/dollar-drops-as-us-federal-reserve-chief-powell-points-to-possible-september-rate-cut/article69965443.ece
[7] https://brics-plus-analytics.org/a-coordinated-trade-response-from-brics/
[8] https://www.imf.org › 1braea2025001-source-pdf
[9] The role of construction as an employment provider : a world-wide input-output analysis / Christoph Ernst and Marianela Sarabia ; International Labour Office; Employment Policy Department, Employment and Labour Market Policies Branch. – Geneva: ILO, 2015 (Employment working paper ; No. 186)
Yaroslav Lissovolik, Founder, BRICS+ Analytics
Image by Federal Government of Brazil via the official website of Brazil’s 2025 BRICS presidency: https://brics.br/en/about-the-brics/visual-identity-of-brics-brazil