World Cup, Olympics seen lifting Brazil richest 1%
Brazil’s millionaire population will soar over the next five years, boosted by the soccer World Cup and the Olympic Games in 2016, according to a personal wealth study.
WealthInsight, an independent research firm, forecast in a report published Tuesday that there would be 234,000 dollar millionaires in Brazil by 2018, up 22 percent on last year’s 192,000.
These individuals’ combined wealth will hit $1.3 trillion by 2018, up from 2013’s $966 billion.
Carlisle noted that the number of South African millionaires rose by over a quarter, some 28 percent, since the country hosted the event. There was also a 163 percent leap in foreign direct investment.
“In previous FIFA World Cups, emerging economies have reaped the rewards of hosting. In South Africa in 2010, vast sums of capital were invested in infrastructure and technology, which has paved the way for the increase in transportation networks producing wealth,” he wrote.
“Just like South Africa, Brazil can increase wealth creation by promoting their country using the World Cup.”
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Brazil could see improved investment in transportation networks, which would be favorable for local wealth creation, increasing trade channels, the report added.
In addition, smaller Brazilian cities will be showcased during the World Cup, as the event will take place across a record 12 locations.
Locations include Brasilia, the official capital and seat of government, financial center Sao Paulo and tourist capital Rio de Janeiro, which will also host the 2016 Olympics. Lesser known cities like Fortalez, Natal, Curitiba and Porto Alegre will also take part.
“Smaller Brazilian cities have a chance to advertise themselves, showing the opportunities that are available to invest, which in turn will lead to increased opportunities in foreign direct investment… high levels of investment have been made in smaller cities such as Curitiba,” said Carlisle.
“Some of the prime examples are Curitiba for car manufacturing and Porto Alegre for agriculture, producing goods such as soybeans and rice.”
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Around one-third of Brazilian millionaires, or 65,058, live in Sao Paulo, with Rio de Janeiro and Belo Horizonta the next most populous locations.
Brazil is a favorite to win the World Cup, having won a record of five tournaments previously. Goldman Sachs rates the probability of a Brazil win at almost 50 percent, versus Ladbrokes bookmaker’s 25 percent.
According to Goldman, a victor nation’s stock market typically outperforms the global market by 3.5 percent in the first month after a World Cup final. The advantage is short-lived however: its market tends to underperform by around 4 percent over the subsequent year.
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Brazil will spend $11 billion or more on hosting the 2014 event, according to consumer data provider WalletHub. This compares to South Africa’s $4 billion spend.