State of Rio de Janeiro

Rio de Janeiro State once dominated Brazil's economy as national capital (until 1960) and cultural center. Today it ranks second with approximately R$1.2 trillion GDP, but the trajectory has been one of relative decline as São Paulo consolidated industrial supremacy. The state's economy increasingly depends on oil and gas extraction from the Campos Basin—offshore petroleum that provides substantial royalties but creates vulnerability to commodity price fluctuations.

The city of Rio de Janeiro (6.7 million residents, 13.6 million metro) remains Brazil's tourism capital. Copacabana, Christ the Redeemer, and Carnival attract visitors globally. The 2016 Olympics and 2014 World Cup brought infrastructure investment but also controversy over favela displacement and cost overruns. Post-event, the city struggles with fiscal crisis and public safety challenges.

The state demonstrates both advantages and risks of oil dependency. When prices rise, royalties fund public services; when prices collapse, as in 2015-16, fiscal crisis follows. Diversification efforts focus on technology, creative industries, and revitalized port zones. Yet the pattern persists: a state that led Brazil economically has become dependent on commodity extraction and tourism while São Paulo captures manufacturing growth.