According to Brazil’s
Ministry of Sports calculations, the FIFA World Cup in 2014 is going to be a
cash cow for the country.
The
nation’s economy is forecast to grow by at least $70 billion as a result
of its hosting the World Cup, the Brazilian Ministry of Sports said July 6 in a
statement. The figure is based on the country’s investments in private
and public investment in infrastructure, heightened consumption, increased
activity in the services sector and, of course, tax collection.
The World Cup is
expected to generate over $30 billion in direct taxes, $10 billion in
additional indirect taxes, and an increase in consumption of Brazilian goods
and services by an estimated $3 billion for the period leading up to and during
the Cup. Approximately 600,000 tourists are expected to come to
Brazil for the games, which could bring in an additional $2.5 billion for
the Brazilian travel industry.
Around three
million Brazilian tourists are expected to travel throughout the country as
well, potentially generating an additional $3.5 billion for travel and tourism.
The figures were announced on July 5 by Ricardo Gomyde, special advisor to
Brazil’s Ministry of Sports, during the 2nd Legislative Forum of the Host
Cities of the 2014 World Cup.
Gomyde said he expects
332,000 permanent jobs and 381,000 temporary jobs to be created through 2014 as
a result of World Cup build-out, mainly new hotels,
airport and reforms at 18 football stadiums from north to south
Brazil. Total expenditures are seen coming in at $14.6 billion
for total infrastructure (at least $1.8 billion for arena reform), and
$6.3 billion for the travel and tourism services sector.
FIFA estimates that
Brazil will have to spend at least $5 billion to get ready for the World Cup,
though infrastructure build-out is expected to cost much more than that.
During Pan American Games of Rio de Janeiro in 2007, the government estimated
costs associated with the games to come in at R$500 million, or $322
million. Final estimates before the games were R$4 billion, according to
Veja magazine in Brazil, one of Brazil’s biggest weekly news magazines.
Veja calculated that World Cup gains have
been hyped up no matter what country is hosting. Yet, growth was registered at
all host countries except for Japan. The US hosted the World Cup in 1994 and
calculated GDP gains of an additional 1.4%. Four years later, France
played host to the Cup and saw its GDP rise by an additional 1.3%. Germany saw
a 1.7% increase to its economy when it hosted in 2006, but was far off on
its prediction of 100,000 new jobs. FIFA did lead to new jobs, but
around 50% less than originally forecast. South Korea’s government said a
half a million people from around the world would flock to the country for the
2002 World Cup. Around 300,000 showed up, according to Veja.