As Team GB made their triumphant way home from the Rio Olympics, having won gold medals across more sports than any other country, the host nation began analysing the success of the games and the impact on its economy.
Light into darknessThe world’s spotlight has been on Brazil for some time in the run up to, and particularly during, the Olympics, but – according to a
Fortune article on the country’s economy – this light was “extinguished with the Olympic flame at Sunday’s rainy closing ceremony”.
The piece highlights an idea in Brazil that after almost a decade of economic growth, the country was at long last “punching its weight”. The hosting of both the Olympics and the 2014 World Cup was supposed to highlight how far Brazil had come.
However, the article quotes Roberto Romano, philosopher, author and commentator on Brazilian society as saying: “There is nothing left to disguise the hard reality that we now face. This grandiose idea that many believed in until recently has nothing to support it anymore.”
Fortune article
The party is overWriting for
CNN Money, Patrick Gillespie says that, now that the Olympics party is over, “Brazil faces a long, uphill battle to resurrect its economy that’s deep in recession”.
Gillespie points out that President Dilma Rousseff is currently facing an impeachment trial, having been suspended for six months after Brazil’s senate voted to begin the process in May. She is accused of “messing around” with the country’s fiscal budget to make it look more promising. The country is also in the midst of its longest recession since the 1930s and over 11.6 million people are unemployed.
Calling the situation a “bleak picture”, experts say Rousseff has little chance of returning to office, according to Gillespie, but there are sparks of optimism that her interim replacement, Michel Temer, will “right the economic ship” – Brazil’s Bovespa stock exchange is up 36% so far this year, the most of any major world market.
CNN Money article
Economic endeavoursBrazil may have secured seven gold medals at the traditional games in Rio, but in a tongue-in-cheek analogy, Nathaniel Parish Flannery writes for
Forbes that it would have added a few more to its trophy cabinet if Latin America held an Olympics with categories for economic dysfunction.
“With its economy expected to contract by almost 4% this year, Brazil would win silver in a race for negative GDP growth and a bronze in a competition for the region’s highest inflation rate,” he writes.
However, Flannery points out that Brazil’s economy may get back on track in 2017, with Santander currently working on a plan to buy Citi’s assets in the country – Latin America’s largest economy – in partnership with Credit Suisse.
4%
How much Brazil's economy is expected to contract this year
Further moves that should bolster the economy include Goldman Sachs’s announcement that it will invest $184m in Brazilian storage firm Metrofit and Shell’s decision to ramp up its operations in the country by 2020, according to Flannery.
Highlighting the endeavours Brazil has already made to improve life for residents, the piece quotes Andrea Murta, Deputy Director of the Adrienne Arsht Latin America Center in Washington, as saying: “In the past couple of decades, Brazil greatly enlarged its middle class and lifted over 40 million people out of poverty and extreme poverty.
“It pioneered internationally recognised social programmes such as Bolsa Familia, a conditional cash exchange program that has transformed the lives of millions with relatively low costs. The Federal Government is now planning to create complementary programs to help beneficiaries have full time jobs and to provide care for early childhood – to name a few.”
Forbes article