Brazil expects a R$ 30 billion economic boost from 2014 FIFA World Cup

07/07/2014 - 18:46
The study examines the initial, direct, indirect and induced impact of the event on Brazil's economy

The 2014 FIFA World Cup Brazil is expected to inject approximately R$ 30 billion into the Brazilian economy, according to a survey conducted by the Economic Research Institute Foundation (FIPE) commissioned by Brazil’s Ministry of Tourism.

FIPE's projection is based on a study of the economic impact of the FIFA Confederations Cup B razil 2013, which took place last June in the cities of Brasília, Belo Horizonte, Fortaleza, Recife, Rio de Janeiro and Salvador. According to the survey, last year's tournament added R$ 9.7 billion to Brazil’s GDP. The expectation is that the World Cup will inject three times as much, or about R$ 30 billion, into the Brazilian economy.

The study examines the initial, direct, indirect and induced impact of the event on Brazil's economy. The basis for calculation used was the sum of public and private investments in infrastructure (R$ 9.1 billion), spending by local tourists (R$ 346 million) and foreign tourists (R$ 102 million) and investments by the Local Organising Committee (LOC) on the event (R$ 311 million). The multiplier effect in the supply chain was then calculated based on these amounts. The study included a survey of 17,000 people and an analysis of spending and investments for the event.

Brazil’s Ministry of Tourism estimates that the World Cup has generated about one million jobs in the country. The total number of jobs created by the World Cup represents more than 15 percent of the 4.8 million formal jobs created during President Dilma Rousseff's administration.

» World Cup surpasses expectation by generating close to R$ 500 Million for 44,000 small Brazilian enterprises

President of Embratur Vicente Neto highlighted the job figures during a press conference held on 19 June at the João Saldanha Open Media Centre in Rio de Janeiro, saying: “It is an extremely significant number that we are celebrating at this time. It is an extraordinary legacy."

The FIPE study cross-referenced information on the estimated impact of the World Cup with data from Brazil's General Register of Employed and Unemployed Citizens (CAGED) collected between January 2011 and March 2014. Out of the total number of formal jobs generated by the World Cup, 710,000 are fixed and 200,000 are temporary.

Should the projections be confirmed, the GDP increase seen on account of the World Cup will exceed the total of R$ 25.6 billion investments planned under the Responsibility Framework, a binding document that sets out the obligations to be undertaken by authorities and other entities linked to the World Cup. The figure includes R$ 8 billion used in the construction and renovation of stadiums, while the remainder refers to urban mobility projects, ports and airport projects, as well as investments in tourism infrastructure, security, telecommunications and additional facilities.

At the June 19 press conference, Embratur President Neto pointed out that Brazil has excelled on the world stage as a prominent venue for events. The country climbed 10 positions in the ranking of the International Congress and Convention Association (ICCA) between 2003 and 2013, jumping from 19th to 9th place among the countries that receive the most association conferences and conventions in the world. The total number of events held in Brazil during that period increased from 62 to 315, and the number of cities hosting events increased from 22 to 54. The progress is a result of a decentralization policy adopted to attract international events.

Source: Open Media Centre

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