Brazil's economy is under achieving.

Among the original BRIC countries (Brazil, Russia, India and China), which have been praised for their speedy development and steady march toward eventual dominance of the global economy, Brazil has long been regarded as an under achiever.

Nothing uncovered in our detailed look at Brazil's economy for this review leads to any conclusion that would justify dispute of the under achiever idea.

For example, an April 20, 2007 wire service story filed by Reuters reporting from Brasilia said that a government think tank, the Institute of Applied Economic Research (IPEA), revised its estimate of 2007 GDP growth upward to 4.2 percent. This was mainly due to a change in the methodology IPEA uses to calculate GDP, and brings Brazil into compliance with international GDP measurement standards.

The methodology change also makes Brazil's GDP estimate comparable to the International Monetary Fund's (IMF) GDP estimate for 2007 of 4.4 percent.

But no matter which estimate turns out to be correct, Brazil's progress pales in comparison with what the other BRIC countries are doing.

An April 2007 analysis published by The McKinsey Quarterly says Brazil's stagnating growth is mainly due to poor productivity, which rests on the foundation of a huge, inefficient "informal" economy (40 percent of GDP). So much competing cheap labor makes it very difficult for local firms to invest in productivity enhancing equipment-with growth being the prominent casualty.

It doesn't help, says McKinsey, that the government spends too much, that the judicial system is outrageously overloaded and inefficient, and that the country's infrastructure is basically falling apart.

Meanwhile, May 2, 2007 releases from Brazil's national statistics office show that consumer confidence fell again in April 2007. Expectations about the future of the Brazilian economy were down as well (nearly 2 percent). The retail sales index for February 2007 was down nearly 8 percent. And sales of durables were down 17.5 percent.

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