RIO DE JANEIRO: Brazil’s Institute for Applied Economic Research (IPEA), a public sector institution in the South American nation, has concluded in its latest research that hosting the 2016 Olympic Games in Rio de Janeiro has proven to have had a positive impact on the local economy.
Had the event not been held, Rio would have seen a 7.5% fall in GDP ($1000 per person) during the three years leading up to it. Rio’s economic state is crucial in determining the macroeconomics of the country, which signifies that Brazil was prone to its worst ever period of recession in its history.
A survey conducted by the Social Policy Centre at the Getulio Vargas Foundation in 2016 showed that the base of the social pyramid in Rio mostly benefited from the increase in labour income during the pre-Olympic period. The income of the poorest 5 per cent grew by 29.3 per cent, compared to 19.96 per cent for the richest 5 per cent. Job creation accounted for 82 per cent of the local economic growth.
Another IPEA study published in 2017 already linked the preparation and delivery of the Games with growing economic activity. It found that the percentage of the population without a paid occupation in Rio dropped from 8.1 in early 2012 to 4.2 in the middle of 2015, while it went from 7.9 to 8.3 across the country as the effects of the recession started to be felt.
