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In 2009, Brazil won the 2016 Summer Olympics bid. Their economy was healthy, the sixth largest in the world by 2011, and the Olympics were expected to be exceptionally profitable. Despite this, with less than one month until the start of the Summer Olympics in Rio, Brazil may be experiencing one of their worst economic crises since the 1930's. Brazil has been declared a state of financial disaster, and has remained entrapped in a recession causing their economy to shrink 3.8 percent in 2015. A federal bailout of $900 million given to the government was insufficient to revert the crisis. Government corruption, tax exemptions, falling commodity and oil prices, and the Zika outbreak are all contributing factors to the economic turmoil.
Unemployment has risen 11 percent, and consumer spending has plummeted. In May of this year, Brazil’s retail stock, one of its main sources of income for many locals, dropped 9 percent. The commodities produced in Brazil, such as oil, sugar, and coffee, are now being sold for the lowest price in two years. Just last month, Brazil’s Central Bank raised its 2016 inflation from 6.6 percent to 6.9 percent. In addition to the shrinking economy and highest inflation point in 13 years, critics believe that the U.K.’s decision to leave the European Union in June will likely further hurt Brazil.
Along with its economic crisis, Brazil’s environmental and security crisis continue to alarm the world. In the last week of June, Brazilian police stated to the press that a mutilated body washed up on one of the beaches where the Olympic volleyball competition is scheduled to be held. This frightening discovery of human remains on Copacabana Beach is the reality of the fact that crime rates have risen and that the Brazilian government is unable to pay the salaries of their police and firefighters. Law enforcement have taken to the streets to show how visitors of Brazil are not safe.
With the time creeping up to the Summer Olympics, Brazil remains in a state of economic disaster. The previously mentioned combination of negative factors will likely drive Brazil further into their economic decline, offsetting any benefits which the Olympics might bring.
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