World Economy

Brazil’s economy heats up for Rio Carnival

Karen Gilchrist, Digital Reporter
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Rio Carnival

Members of Mocidade Samba School dance in Rio de Janeiro, Brazil, on February 20, 2012.
William Volcov | News Free | LatinContent | Getty Images

Brazil is hoping renewed tourist interest will provide a boost to its economy in 2017 as it seeks to capitalise on the legacy of 2016's Olympic and Paralympic Games.

The country's ministry of tourism expects the flow of foreign tourists into Brazil to increase by around six percent over the coming year, based on growth registered by previous hosts of the game.

Last year, Brazil welcomed a record 6.6 million foreign tourists to its various coastal cities which played host to the games. This contributed $6.2 billion to the national economy, an increase of 6.2 percent on the previous year.

"England, the last country to host the Olympic and Paralympic Games, grew by 0.92 percent from 2011 to 2012. In subsequent years, the average increase was 5 percent a year," Tourism Minister Marx Beltrao said in a press release ahead of this year's Rio Carnival. "The numbers are extremely positive ... they show that we can still make great progress."

This year, Brazil is expecting 1.1 million foreign tourists to visit the annual Rio Carnival, held from February 24 to 28. As the country heats up for the event, CNBC takes a look back at the highs and lows that have characterised the country's global position over recent decades and what the future might hold for South America's largest economy.



1950s

Parade revelers dressed in costumes pose on a street during Carnival in Rio De Janeiro, Brazil.
Earl Leaf | Michael Ochs Archives | Getty Images

Average GDP growth rate: 7.1 percent*

Following a period of political unrest under the dictatorship of Getúlio Dornelles Vargas, Brazil reinstated its democracy and successfully elected Juscelino Kubitschek as its new president in 1956.

Under his leadership, the country's economy flourished and, by the end of his term, industrial production was up 80 percent.

His most notable achievement, however, was the relocation of the country's capital away from Rio de Janeiro to Brasilia, a purpose-built city a few hundred miles inland, in a bid to redistribute the population away from the coastline.

*All GDP growth rates refer to data from Brazil's Institute for Applied Economic Research (Ipea)


1960s

The Carnival in Rio de Janeiro, Brazil, circa 1960.
Pictorial Parade | Archive Photos | Getty Images

Average GDP growth rate: 6.1 percent

1960s Brazil was characterised by another period of political upheaval, with several coups d'état, and by the late 1960s the country had returned to a dictatorship. The era was heavily criticised for its brutality, but also resulted in period of economic boom.

Rio Carnival partied on, despite no longer being held in the country's capital.


1970s

Women in sarongs parading in a street of Rio de Janeiro during the carnival, on March 18, 1976.
Keystone-France | Gamma-Keystone | Getty Images

Average GDP growth rate: 8.9 percent

Brazil's economy continued to grow, peaking at an average growth rate of 8.9 percent, but so too did military repression of Brazilian citizens.

While progress in the country's industrial sector grew, so too did foreign debt.


1980s

Julio Pereira | AFP | Getty Images

Average GDP growth rate: 3.0 percent

By the 1980s the aftermath of previous decades' political turmoil and economic excess became known and a newly democratic Brazil struggled to control hyperinflation.

At its worst point, annual inflation rates hit three-to-four-digits.


1990s

Carnival in Rio De Janeiro, Brazil in February, 1996.
Antonio Ribeiro | Gamma-Rapho | Getty Images

Average GDP growth rate: 1.7 percent

In 1994, the government's finance minister Fernando Henrique Cardoso produced Plano Real (Real Plan) to curb hyperinflation and stabilize the economy.

Cardoso is thought to have laid the groundwork for much of Brazil's recent development and was elected as president for two terms.


2000s

Luiza Brunet performs February 2001 during the second night of Rio de Janeiro's Samba School Parade.
Vanderlei Almeida | AFP | Getty Images

Average GDP growth rate: 3.3 percent

The peaceful transition of power between Cardoso and his predecessor Luiz Inácio Lula da Silva went some way in reinforcing Brazil's political stability.

The latter's tenure, known as Lulism, coincided with another period of economic boom for the country, in which it became one of the world's fastest-growing economies.


2010s

Revellers of Unidos da Tijuca samba school perform in Rio de Janeiro, Brazil on February 8, 2016.
Yasuyoshi Chiba | AFP | Getty Images

Average GDP growth rate: 3.4 percent

In 2012, Brazil briefly overtook the U.K. to become the world's sixth largest economy, but later decelerated into a recession.

Its politics continues to be dogged by corruption. Most recently President Dilma Rousseff was impeached and removed from office in August 2016 for breaking budgetary laws.

Brazil continues, however, to hold its position as one of the world's 10 leading economies. It has recently formulated closer trade deals with China and its newly discovered offshore gas reserves will help the country in its efforts to reduce dependence on its South American neighbors.

A boost to tourism numbers could provide a helpful buffer for Brazil's economy as it lays the groundwork for these new relationships.