Major events push Brazil’s development

It is a well known fact that hosting the FIFA World Cup and the Olympic Games consecutively can boost any host country’s economy. The improvement of the infrastructure for example is an important economic drive to the national market. An imediate effect post games is the stock market experience, expected to have price jumps.

This particular situation has already occurred three times in history: in Mexico (Olympics 1968 and World Cup 1970), in Germany (Olympics 1972 and World Cup 1972) and the USA (World Cup 1994 and Olympics 1996). In both cases, the major consecutive events determined very positive impulses for both economy and stock markets, during and post event.

According to analysis, the classic pattern is: as governments invest in infrastructure projects first, construction companies, logistic companies and the energy sector are the first to benefit. In a second phase, all companies of the communication spectrum have their opportunities to capitalize the opportunity. In parallel, not only the consumption sector benefits greatly, but also tourism and telecommunications companies.

According to a study by the Centre for European Economic Development (ZEW), Olympic Games have more impact on economies of less diversified economies. On emerging markets, such as Brazil, however, they can act like a "miracle". Because Brazil is hosting the two biggest sport events in the world in a very short period of time, is very likely that the country will never return to 'business as usual'.  

Ricardo Demarchi & Lucas Lacombe – MEI Associate Directors, Recife, North East Brazil +55 81 3037 4488 

Additional information