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FIFA economics Brazil

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How FIFA affected business

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FIFA economics Brazil

  1. 1. 0 0.5 1 1.5 2 2.5 3 3.5 2013.5 2014 2014.5 2015 2015.5 2016 2016.5 GDP growth % GDP growth % *As forecasted by World Bank
  2. 2. • Brazil spent $ 14 billion on infrastructure and organization. • Major infrastructure spending on – – Stadiums – Airports – Port and urban mobility • Harbinger of expected future growth.
  3. 3. $3.6 billion spent on 12 new and refurbished stadiums across 5 cities Boosted core sectors like steel, cement and power Plan to spend 25% on stadium and 75 % on other projects like transport, security and communication failed. Cost overrun by 75 %
  4. 4. Transportation development generated long term benefits Introduction of monorail, metro and expansion in airport handling capacity Many projects were scrapped due to delays and cost overrun Only 36 of planned major 93 projects completed
  5. 5. Brazil attracted 6,00,000 tourists during the world cup from more than 180 countries. 62 % visited country for the first time Generated more than 15 per cent of the 4.8m jobs created during the nearly four-year-long administration of president Dilma Rousseff Opportunity for tourism sector to convert one time visitors to frequent visitors
  6. 6. $1 billion boost to food and beverage industry Industry set to explore “Fan Parks” concept of selling drinks and fast food Boost may be temporary in nature. Food prices artificially jacked up
  7. 7. • The domino effect of direct actions can be clearly seen as a series of economic, social and cultural developments. • Interconnected nature of economics leads to intermediate spending. • Opportunities for other exporting nations. • HSBC business expectation index moved to 73.3 in July, 2014 from 52.2 in 2013. • Brazil’s win in world cup would have sustained the Domino effect
  8. 8. • Intensified protests against huge spending on infrastructure in a country which high poverty levels.
  9. 9. • Stadiums and other infrastructure would end up standing like white elephants
  10. 10. • Fuelled inflation that may not end up with World Cup
  11. 11. • Corruption and mismanagement. • Accidents, delays and cost overruns. • Using new infrastructure to return to growth trajectory.
  12. 12. • Improving standard of living • Using tourism industry for long term benefits. • High quality sports development program The World Cup has put an end to Brazil’s five-year stagnant foreign tourist inflow, from current 5 million to 7.48 million until 2014 and 8.95 million in 2018…
  13. 13. Is it a success story? Since 1974 winners outperformed markets for the month following the finals. Even host nations outperformed even after losing the world cup Businessmen and corporate flock to such events. Sombre mood of fans can leads to reduced investor confidence.
  14. 14. Better luck next time …Brazil!! Thank you

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