Impact of Olympics on Brazil

For decades, Brazil has been known for its breathtaking beaches, rich culture, and unique cuisine. However, there’s much more to Brazil then just those elements. To date, it’s one of the fastest-growing nations in the world, and in several ways, offers some of the best prospects among emerging markets and thus, say many, deserves to be a core holding in any international portfolio. Characterized by large and well-developed agricultural, mining, manufacturing, and service sectors, Brazil’s economy outweighs that of all other South American countries, and it is expanding its presence in world markets.

So what do the Olympics mean for this re-emerging nation? Possibly, quite a great deal. The election of Rio de Janeiro, Brazil’s biggest city, as host for the 2016 Summer Olympic Games is expected to cause a sharp increase in foreign investment in the country. The Rio games will be the 2nd Olympics held in Latin America (after Mexico City in 1968), and the first ever held in South America. The largest sporting event in the world, it’s predicted to exert such a strong influence over many Brazilian investors and the lives of everyday workers as well.

The Gringo Times took a close look at the Ministry of Sport’s study, in order to explore the economic impact of the much-anticipated ‘Brazilian Games.’ According to the study, the huge financial injection will benefit several different entities: $2.8 billion will fund the structure of the Brazilian Olympic Committee, the organizers of the Games, and the remaining $11.6 billion will finance public and private entities for the construction and repairs of Olympic Games infrastructures such as stadiums, sports pitches, water-sports venues, and roads and subway stations. The study also claims that the input of $14.4 billion for the Olympic preparations will generate a 4.26 production multiplier, which will inject approximately $51.1 billion into the Brazilian economy from 2009 to 2027. This means that for each US dollar invested in the organization of the games, private entities will invest $3.26 in production chains related to the event.

So far, there have been 55 sectors identified within the Brazilian economy which will benefit from the preparation of the Olympics. Those that will reap the biggest gains are the construction sector, which will increase by 10.5% , followed by real estate (6.3% ), services (5.7%), oil and gas (5.1%),and  transportation and communications (4.8%t). This is not only a boost for Brazil, but for the Latin community as a whole. The Olympics affords the poor an opportunity to increase their earnings, and the rich the opportunity to continue to build their empires.

Image courtesy of More Than The Games (UK)

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