2014 Soccer World Cup Will Have Positive Impact on Brazilian GDP
By Dialogo August 15, 2011
The 2014 soccer World Cup in Brazil will have a positive impact of 1.5 percentage points on that country’s gross domestic product (GDP) over the next three years, with the direct creation of at least 250,000 jobs, according to the bank Itaú Unibanco.
The institution presented a study on the economic effects of hosting the World Cup, the first to be held in Brazil since 1950.
Itaú Unibanco’s head economist, Illan Goldfajn, affirmed that public and private investment for the event will spur GDP growth and open the way to even greater expansion of the Brazilian economy over the long term.
“The direct spending impact, both infrastructure and private-sector spending, accounts for 1 percent of GDP, and the remainder comes from the multiplier effect,” Goldfajn said.
The Brazilian federal government has a budget of 20.6 billion dollars for investments in stadiums, airports, and transportation and communications infrastructure, among other areas directly linked to the World Cup.
Private investment is concentrated in the tourism sector, chiefly in the construction of new hotels.
The Brazilian Central Bank estimates GDP growth of 4 percent in 2011. Last year, the Brazilian economy grew approximately 7.5 percent.