Brazil’s recent World Cup and the upcoming Olympic Games, to be held in Rio de Janeiro in 2016, may have given global notoriety to the already famous city, but the two mega events also had a negative impact on inflation and businesses. CCTV America’s Lucrecia Franco reports from Rio de Janiero.
Inflation raises after Brazil's mega eventsBrazil's recent World Cup and the upcoming Olympic Games, to be held in Rio de Janeiro in 2016, may have given global notoriety to the already famous city, but the two mega events also had a negative impact on inflation and businesses. CCTV America's Lucrecia Franco reports from Rio de Janiero.
Marco Modiano owns a chain of seven trendy coffee shops in Rio’s most affluent neighborhoods, and he realized a possible increase in rents ahead of the mega sporting events.
“I foresaw that there would be negotiation issues during the World Cup and the Olympics, so I sat with my landlords, who have been with me for 17 years, to renegotiate the contracts that would expire,” he said.
Many of his neighbors were caught by surprise and have been forced to close down their stores. According to Secovi-Rio, the city’s property association, commercial rents have gone up this year by almost 10 times the rate of inflation.
Inflation reached 6.75 percent in September, which is the highest annual rate in almost three years, and Rio’s store owners are struggling to survive with permanent sales and special promotions.
Despite the increasing number of stores closing, retail experts said Rio’s landlords are keeping property prices up, expecting a business surge, and making the city one of the priciest in Brazil.
For what President Rousseff’s re-election means for the Brazilian economy, CCTV America talked with Arturo Porzecanski, the economist and director of the International Economic Relations Program at American University.