Gains With the Cup Forecast in Brazil: Study

by Himabindu Venkatakrishnan on  April 8, 2014 at 11:54 AM Lifestyle News   - G J E 4
Brazil will get a major shot in the arm with the World Cup related spending, tripling a a $4.2 billion contribution to the economy made at last year's Confederations Cup, says a study by the Institute for Economic Research Foundation (FIPE) revealed Monday.
 Gains With the Cup Forecast in Brazil: Study
Gains With the Cup Forecast in Brazil: Study

The study for state tourist board Embratur estimated the June 12-July 13 tournament should more than triple last year's $4.2 billion gain which emanated from a total $9 billion spending at the Confederations Cup, a World Cup dress rehearsal.

"The expectation is that the World Cup will generate three times this value," a Tourism Ministry statement said.

Brazil has invested more than $11 billion in this year's extravaganza on new stadiums and infrastructure as the giant Latin American nation of 200 million stages its first World Cup since 1950.

But many citizens are appalled at the price tag in a country whose public services and infrastructure are in urgent need of a major overhaul.

Last year, more than a million people took to the streets during the Confederations Cup to protest at spending on the tournament and World Cup.

Monday's study showed that just 58 percent of the cash generated by the Confederations Cup remained in the six host venues -- the World Cup will have 12 -- with the remainder being distributed countrywide.

"This result shows that the impact of the tournament is not restricted to match venues. The impact is for the whole of Brazil," Tourism Minister Vinicius Lages said in the report.

Brazil's economy, after a period of strong growth over the past decade, has faltered more recently and last month Standard & Poor's lowered the country's credit rating to BBB-, the lowest level for investment grade debt.

Moody's rating agency signalled last week that the World Cup would have only a minor effect on the economy as a whole, although it forecast some sectors such as retail, food and beverages, accommodation and advertising sectors would benefit.

Brazil expects to welcome some 600,000 foreign visitors to the World Cup and some three million domestic tourists are expected to criss-cross the country.

The two-week Confederations event saw 303,000 jobs created and the World Cup will see some 48,000 jobs created in tourism alone, according to the National Confederation of Commerce.

The World Cup is expected to boost GDP by around 0.5 percent, analysts forecast.

Source: AFP

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