May 21, 2014
The government expected over 60,000 tourists to come for the games, and politicians promised to upgrade dilapidated airports, crumbling roads and other transportation infrastructure. President Dilma Rousseff’s estimated the month-long event would add more than half a percentage point to Brazil’s economic growth while adding more than 500,000 new jobs.
Brazil’s sluggish economy will only get a “modest” boost, according to the median of 116 estimates in a global sample of economists polled by Reuters last week. This leaves a concern that the country’s four-year long economic slump will continue. But image is everything when the World Cup is the prize.
Broken promises made by the government sparked violent protests over the warm-up games in June 2013. Then, TV cameras showed the world scenes of broken shop windows and building on fire. The effect of the violent clashes between police and demonstrators was chilling.
The economy suffered then, and it is still suffering today, as protests and demonstrations continue in many of the host cities. While the protests are not as violent as the ones in 2013, they have still caught the viewing public’s eye across the world. There are still many hotel rooms available in the host cities, including Sao Paulo, the host of the opening match.
Airports are seeing a decline in plane reservations in June and July, as business travelers avoid the period. There is also the real concern that many retailers will close their stores and shops, hurting sales. “Most of the local houses, including ourselves, are not including any effect of the World Cup in our growth scenarios,” said Marcelo Kfoury, Brazil chief economist with Citi.
Despite the fears of huge demonstrations keeping many visitors away, James Lockhart Smith, an economist with Maplecroft says, “The negative publicity generated by massive protests, police crackdowns, and images of falling cranes and half-built stadiums will partly be offset by what is likely to be a successful football tournament against all the odds.”