Rio Olympics won’t help Brazil’s economy much, Moody’s says

The Summer Olympics in Rio de Janeiro won’t do much for the battered Brazilian economy, but a few select companies stand to reap significant benefits, Moody’s Investors Service wrote in a report published Monday. The credit-rating company focused on the impact of Olympic tourism, specifically the 350,000 spectators the government expects to visit Rio during the Olympics in August and the Paralympics in September. It didn’t address the potential effects of the spread of the Zika virus, which has emerged as a wild card for economic forecasters. Some athletes have expressed concerns about traveling to the country, and at least one public health expert has called for the Games to be moved. Without making a call about Zika, Moody’s analysts led by Barbara Mattos wrote that more retail activity and tourists spending with foreign currencies should benefit Cielo SA, Brazil’s largest card-payment processor. Localiza Rent a Car SA, the official car rental company of the Games, and Latam Airlines Group SA, official airline of International Olympic Committee members, also stand to gain. More lasting benefits will accrue to the Rio de Janeiro metropolitan area, where the events will take place, Moody’s said. Not including sports facilities, the city has gotten about about 25 billion reais ($7.1 billion) in infrastructure investment - toll roads, ports, other projects - as a result of the Olympic preparations. The Olympic legacy will also include a key subway expansion and a tramway project from domestic airport Santos Dumont, all of which could make the city a more efficient place to do business, Moody’s said. Brazil is in the midst of a crushing recession and political upheaval that led to the removal of Dilma Rousseff from the presidency three months before the start of the Games. Moody’s said the Olympics are neutral for Brazil’s sovereign credit quality, and Brazil’s economy is still set to contract 3.7 percent this year.

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