The countries that make up the BRICS have had such disparate paths in economic development since the acronym's introduction in 2001 that grouping them together may no longer make sense, S&P Global Ratings said in a report.
The acronym for Brazil, Russia, India, China and South Africa was based on the widely held perception that these countries had similarly promising growth prospects and would play a key role in shaping the global economy. However, since then only China and India have maintained stable pro-growth economic policies and expanded their role in the global economy, while the other three countries have recorded poorer long-term performance and consequently weakened their influence.
"As a result, their disparate paths weaken the analytical value of viewing the BRICS as a coherent economic grouping," the rating agency said.
Ratings' economic assessment of the countries ranked India and China positively, reflecting their track record of faster per-capita GDP growth, and rated the other three economies relatively poorly due to weaker expansion. The agency expects China to maintain GDP growth of around 5% on average in the coming years, while India's economic output will also remain strong.
The agency's ratings for BRICS countries have also diverged since 2001, with China rising to A+ from BBB and India to BBB- from BB due to their stable and predictable economic policies despite vastly different political systems.
Meanwhile, South Africa dropped to speculative-grade BB from BBB- while Brazil remained at BB-, reflecting the inability of both countries' political leaderships to effectively restore economic growth and stabilize public finances.
Russia also saw an improvement in its credit rating to BBB- from B+ in 2001, but its GDP growth rate has remained "disappointing" due to structural weakness.