What positive impact will hosting the World Cup in Brazil have on the social economy of Rio de Janeiro?

The World Cup can benefit some sectors, but demonstrations, urban traffic chaos and high prices can also have a negative impact on the economy.

Benefited industries

The tourism industry should be the biggest beneficiary during the World Cup. The tourism department estimates that 3.7 million domestic and foreign tourists will travel through Brazilian cities during the World Cup, bringing 6.7 billion reais (approximately US$2.99 ??billion) in revenue to the tourism industry.

The urban construction industry is also a beneficiary. The survey shows that 30% of the respondents believe that the World Cup will have a positive impact on enterprises, only 9% of enterprises believe that they will suffer a negative impact, and 52% of enterprises believe that there will not be much impact.

In terms of employment, officials estimate that the World Cup will create 175,000 jobs, some of which will still exist after the World Cup. Jobs such as security, in-game hospitality and tourism sector hospitality will surge. The Brazilian National Federation of Commerce, Services and Tourism predicts that employment will expand in accommodation, catering, transportation, travel agencies and cultural services, with nearly 48,000 jobs added from April to June 2014.

Damaged industries

Brazilian economists generally believe that the World Cup will bring some benefits, but the impact will be short-lived and limited to some economic sectors. For example, the World Cup can boost TV sales, but there is no evidence that this will have an overall impact on the industry, as TV sales are likely to plummet in the months following the World Cup.

The event may have a negative impact on some departments. Too many holidays during the World Cup will cause economic stagnation. Scholars from McKinsey University predict that daily retail sales may drop by nearly 5% on game days. Throughout June and July, retail sales may fall by 1.5 billion reais (approximately $669 million).

In addition, large-scale demonstrations may occur during the World Cup. Researchers at the Vargas Foundation in Brazil said that the demonstrations had an impact on the entire country of Brazil. The parade during the Confederations Cup last year caused great harm to the Brazilian economy, especially the parade caused a large number of public and private property damage.

Overall impact

A consulting company called "Trend" said that everyone expects the World Cup to have an impact on economic activity, but the impact on the entire economy will be very small. Serrano, senior economist at Espírito Santo Investment Bank, believes that the impact of the World Cup on the economy is "almost zero." He said: "Generally speaking, industrial production should be the highest in May and will almost stagnate in June and July. The specific impact is currently unknown, but the growth is certainly limited."

Moody's report said, The investment in upgrading World Cup infrastructure - football stadiums, airports, ports and urban transportation - is about 26 billion reais (approximately US$11.603 billion), which accounts for a very low proportion of Brazil's investment plan from 2010 to 2014.

Almeida, an economist at the Brazilian Institute of Practical Economics, said: "The most direct impact is on sports venues. Other infrastructure is also being built, but Brazil will also improve these facilities whether it hosts the World Cup or not. The so-called The legacy of the World Cup is indeed very small in Brazil compared to other countries.”

The Brazilian government’s economic growth forecast in the 2014 budget is 2.5%, and the central bank predicts 2%, compared with 2.3% in 2013. The economic growth rate has not changed much. It can be seen that the government does not have high expectations for the World Cup.