Find out how the result of the World Cup will affect the Brazilian economy
It’s the year of the World Cup and the Brazilian is already starting to dream of the long-awaited sixth championship, but how can it actually have a positive or negative impact?
When we talk about retailers in the party, food and drink sector, it is natural for revenues to increase as Brazil wins every game, and with that, in the end, the six-time championship makes fans and shopkeepers happy.
Other sectors are also affected by the World Cup, such as clothing, subscriptions to sports channels and the sale of new televisions.
If a sixth Scudetto becomes a reality, common sense suggests that Brazilians, in general, are naturally more euphoric. Therefore, it would not be strange to assume that, out of joy, many people will make more decisions out of impulse.
It’s a World Cup close to Christmas
It is important to remember that, unlike other cup editions, this one will take place close to Christmas, with the final scheduled for 18 December. So, to what extent would spending with the end-of-year holidays be directed towards eventual title celebrations?
This answer will have to wait and see, as this will naturally be a period when consumption is highest.
If he is not a champion, the most important factor to take into consideration, surely, is the total number of games that the selection will be able to play. If he gets to the final, there will be 7 games. Seven opportunities for the sectors mentioned to obtain substantial income.
There is no clear cause and effect relationship found between a world title and the winning country’s increased economic performance.
The stock market goes up when the country is champion
However, in a survey of an American bank With data from 1974, the study shows that the stock indexes of the champion countries grew, on average, by 3.5% more than the global references in the month following the championship. The only exception was Brazil in 2002, who didn’t get this lead.
Even so, this joy is short-lived: the same study shows us that, after four months of stock euphoria, local markets tend to underperform 4% of global averages.
The conclusion we can reach is the following: there will be sectors that will suffer a more positive impact than others, but in general the results of the selection at the World Cup usually do not have a direct impact on the country’s economy.
In the years that the selection was sample, there is no correlation that establishes a clear link between the world title and higher GDP growth.
But, in the polls we carried out in the IBGE databases, we observed that, of the five world titles won by the Brazilian team, in four opportunities the GDP of our country grew at a faster rate than in the year preceding the title. On the other hand, the GDP of the year following the title grew less and less than the previous year, with the exception of 1970.
Most of the economic effects are felt by the countries that host each edition of the event, with particular attention to the infrastructure sector. However, we can also see more robust revenues in the retail, food and tourism sectors in the other participating countries.
João Victorino is a corporate administrator and personal finance specialist, with an MBA from FIA-USP.🇧🇷
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Source: Terra
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
