One of the main challenges confronting the BRIC economies is accelerating inflation which has been largely driven by rising food and commodity prices. Despite a series of rate hikes by the respective central banks, inflation continues to run well above the comfort level for policy makers - Brazil (7.2%), Russia (9.5%), India (9.2%) and China (6.2%).
The rising interest rates are slowing the pace of industrial growth. The BRIC economies grew at a softer pace in the first half of the year on account of this ongoing monetary tightening. However, robust domestic demand on the back of sustained consumer spending and investment is expected to drive economic growth going forward.