It appears that the Brazilian business community may experience a perfect storm of lost productivity in 2014. That’s because a unique combination of special events, holidays, Carnaval, and elections will significantly reduce the number of days worked throughout the year.
Even during many of the days when people are at work, their minds may be elsewhere. Economists are suggesting that this will place a noticeable drag on Brazil’s already slow economic growth.
Here is how the “calendar effect” may impact productivity and growth. First, Brazil’s summer vacation season already reaches into late January. Very little work gets done, and many joke that the business year doesn’t begin until the end of Carnaval.
Second, the timing of the lunar calendar extends Carnaval to March 4th. The pre-Lenten festival usually ends in February. This timing may cause many Brazilians to take longer vacations or work fewer hours for additional weeks.
Third, the World Cup takes over Brazil beginning on June 12th. It’s widely expected that productivity will take a huge hit for several reasons. Traditionally, offices and factories shut down so that employees can watch Brazil’s team play. Even when Brazil’s team isn’t playing, many may be streaming other matches to view while at work.
Also, Brazil has passed a law that gives all 12 cities that are hosting matches the power to declare game days a special holiday. The goal is to reduce traffic, allowing fans to more easily get to and from the stadiums. A sure result is that less work will get done until the World Cup ends on July 13.
Traffic on the roads and congestion at the airport may also cause those in the Brazilian business community to postpone business travel during the World Cup. That’s according to a study conducted by the Fundação Dom Cabral business school.
To complete the perfect storm, Brazil will also be distracted from work during the presidential campaign leading up to the election on October 5th. While none of the candidates opposing President Rousseff are campaigning on platforms that represent a large shift from Rousseff’s policies, corporate executives are saying that they may be cautious about making investments until the election is over.
The only thing that could possibly offset these challenges to Brazilian productivity and economic growth is the injection of cash expected from foreign tourists. It’s projected that tourism spending in 2014 could reach a high of US$9.2 billion.
