Rousseff met with IOC President Jacques Rogge after being sworn in the capital of Brasilia and said Brazil will "give all guarantees" to make sure Rio can host "a great event."

Rousseff, 63, is replacing Luiz Inacio Lula da Silva, who played a key role in helping the Brazilian city win the Olympic bid last year but has had to step down as President after serving the maximum two terms.

The new leader, the country's first female President, whose terms ends in 2014, said Brazil "will host the best Olympic Games in history".

Rogge and other IOC members were in Rio on New Year's Eve for the unveiling of the Games' logo.

Hosting the Olympics and Paralympics in 2016 and, two years before that, the FIFA World Cup, will require an accelerated modernisation of airport and transport infrastructure, as well as large investments in public safety.

The second stage of the Programme to Accelerate Growth (PAC 2) will be an attempt to tackle infrastructure problems.

The first stage of PAC promoted improvements in the areas of sanitation, housing, transportation, energy and water resources, and was coordinated by Dilma herself, when she used to be Lula da Silva's chief of staff.

Dilma, a former Marxist guerrilla who was tortured and imprisoned during Brazil's long dictatorship, has inherited from Lula a country in the midst of an economic and political rise.

She was arrested in January 1970 and sentenced to six years in prison for belonging to a violent underground group responsible for murders and bank robberies.

After nearly three years behind bars, during which she said she was tortured by electric shocks, she was released at the end of 1972.

She continued her political path and eventually joined Lula's Workers Party in 1986.

In 2000, she divorced her second husband.

Their daughter, Paula, made them grandparents in September.

After Lula became President in 2002, he named Rousseff his Energy Minister and then, in 2005, his Cabinet chief - a post analogous to Prime Minister.

"The task of succeeding [Lula] is difficult and challenging," said Dilma.

"But I'll know how to honour his legacy.

"I'll know how to consolidate his work and build upon it."

Although Brazil's economy is booming, expanding by more than seven per cent last year, the currency, the real, has soared so high against the United States dollar that the country's vital export sector is starting to sweat.

Lula and other officials have blamed China and the United States for waging an "international currency war" by devaluing their own currencies to help their own exporters at the expense of other countries.

But Lula has predicted that hosting the World Cup and Olympics and Paralympics will ensure Brazil's economic growth continues.

"We are the pre-salt power [in reference to the vast pre-salt oil deposits], the country that will be hosting the World Cup and the Olympics," said Lula.

"If it depends on Dilma and Guido [Mantega, Brazil's Finance Minister], we will become the fifth world economy by 2016, and we are going to conquer that gold medal."