BRASÍLIA: A study by the Brazilian Ministry of Tourism into the economic impact study of the FIFA Confederations Cup Brazil 2013 will doubtless be used by World Cup organisers to respond to street protest critics about the value of the staging investment.
The Confed Cup was held last June in Brasilia, Belo Horizonte, Fortaleza, Recife, Rio de Janeiro and Salvador. The study’s findings show financial transactions for the period, their effect on GDP and job generation, as well as provide input for forecasts in relation to the World Cup itself.
According to the study conducted by the Economic Research Institute Foundation (FIPE), the tournament led to a total of £5.5bn in financial transactions including £2.7bn in expenditures by tourists, the Local Organizing Committee (LOC), as well as private and public investments.
The other £2.4bn corresponded to income added to the Brazilian GDP. At the World Cup the expectation is that three times this value will be made in transactions, possibly reaching £7.5bn.
Of the £2.4bn some 58pc was spent in the host cities and 42pc in the rest of the country.
“The result shows that the tournament’s impact is not restricted to host cities. It has an impact on the whole of Brazil,” stated Brazil’s Minister of Tourism, Vinicius Lages.
The study analyzes the direct and indirect impact on the economy. As bases for calculation, the sum of public and private investments in infrastructure (£2.7bn) were used, in addition to how much national (£83.5m) and foreign (£25m) tourists spent, plus investments made by the Local Organizing Committee (LOC) for the event (£76m). From these amounts, the multiplier effect across the different sectors of the economy was assessed.
Lastly, the impact of the Confederations Cup on job generation was measured. The equivalent of 303,000 jobs were created, taking into consideration the concept of “equivalent man/year” which does not mean that the same number of new jobs was necessarily created. Part of the demand for new employees may have been met by overtime or simply by using current employees more efficiently. From this total, 60 percent were in host cities and 40 percent in the rest of the country.
Rio de Janeiro recorded the highest number of financial transactions among host cities (£1.5bn), which corresponded to a £700m increase in GDP for the city. In addition, Rio de Janeiro recorded the highest number of jobs generated (59,000) among the tournament’s host cities. Together, Brazilian and foreign tourists spent £28m in Rio de Janeiro.
The study polled approximately 17,000 relevant members of the private and public sector as well as tourists, and analyzed expenditures and investments made in relation to the staging of the event. Investments made for the Confederations Cup represent 77 percent of the total investments anticipated for the tournament’s six host cities in 2013 and 36 percent of the total predicted for the 12 World Cup host cities.
Data is based on the April 2013 version of the World Cup Responsibility Matrix.
SOURCE: Ministry of Tourism
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