July 28 (Bloomberg) -- The three-year buildup to the 2014 soccer World Cup will boost host country Brazil’s economy by 1.5 percent of its annual gross domestic product, said the chief economist of Itau Unibanco Holding SA, Latin America’s largest bank by market value.
Brazil has budgeted $20.6 billion to construct the roads, stadiums, airports and other projects required to host sport’s most-watched event. That level of investment will create 250,000 new jobs and generate about $24 billion, Itau’s Ilan Goldfajn told reporters at a press briefing in Rio de Janeiro today. The city will host the qualification draw for the World Cup in two days.
“The impact of the spending both on infrastructure and spending by the private sector produces 1 percent of GDP, the rest comes from the multiplier effect,” Goldfajn said. Itau is an official World Cup sponsor.
Germany, which hosted the 2006 event, and last year’s host South Africa saw GDP increases of 0.5 percent during the World Cup year, according to FIFA and government figures.
Brazil is hosting the World Cup for the second time after staging the competition in 1950. It’s facing some of the same questions that organizers in South Africa faced in the years leading up to the 2010 event, the first time the quadrennial competition was held on African soil.
Millions of Visitors
Work hasn’t been completed on any of Brazil’s 12 stadiums slated to host games, airports must be renovated to cope with the demands of moving millions of visitors and the country’s hotel inventory needs to be expanded. Stadiums in Sao Paulo, Natal, Cuiaba and Porto Alegre are behind schedule because of financing and engineering concerns. Brazil also faces scrutiny about crime, as did South Africa.
The country is determined to be ready and prove its doubters wrong, said Rodrigo Paiva, a spokesman for the Rio de Janeiro-based local organizing committee.
“During the World Cup in South Africa there were no cases of violence, rape, robbery or burglary specific to the tournament,” said Paiva.
Brazil’s GDP grew 7.5 percent last year, the fastest rate in two decades, and the government forecasts 4.5 percent growth this year. Paiva said the World Cup is a catalyst to complete necessary infrastructure work ahead of schedule.
“It’s not that we’re building airports and we wouldn’t consider renovating roads,” he said. “With the existence of the World Cup this process speeds up some construction work that could have taken 25 or 30 years to do.”
To contact the editor responsible for this story: Christopher Elser at email@example.com