Tuesday, May 28, 2024

ECONOMY | 16-12-2022 14:26

Winning 2022 FIFA World Cup could bring GDP boost to France or Argentina

Argentina is better placed than France to reap the economic benefit that typically comes from winning the World Cup, says one academic.

Argentina is better placed than France to reap the economic benefit that typically comes from winning the World Cup, according to an academic who’s studied the historical record.

Football’s world champion tends to enjoy an extra 0.25 percentage point of economic growth in the two quarters following the tournament, according to a recent paper by Marco Mello at the University of Surrey in the UK. 

That’s mainly the result of a rise in exports because the winner enjoys greater international visibility, Mello said in an interview. His research showed an outsized jump in Brazil’s foreign sales after it won the 2002 World Cup, for example. 

And he reckons that out of the two countries due to contest this year’s final on Sunday — a match expected to be watched by half the planet — Argentina, with a similar exporter profile, has a better chance of getting that kind of boost. 

“If there is one of the two countries that might benefit, similarly to Brazil, this is Argentina and not France,” says Mello, a post-doctoral research fellow at Surrey. What’s more, “there may be less of a pronounced effect for France because it is the incumbent winner, so it becomes less of a surprise.”

One other twist, Mello says, is that the different timing of this year’s tournament in Qatar – held in the northern-hemisphere winter, unlike its predecessors — may change the economic effects of winning it.

Earlier studies have also shown that success at the world’s largest sporting event can boost economic growth. Simply getting to the quarter-finals can deliver an increase in exports and a diversification of trade, according to a 2014 paper — which may be good news for this year’s surprise semi-finalists Morocco, and to a lesser extent Croatia. 

Still, the economic backdrop isn’t encouraging for either of the finalists.

France is struggling with an energy crisis and a wave of strikes. Argentina has inflation of close to 100 percent, and is suffering a drought that threatens to slash crop exports next year. 

History suggests that pre-existing economic troubles can limit any gains that come with World Cup victory, Mello says.

“If there is one country in the last World Cups that did not benefit much from winning the World Cup, this is Spain in 2010, when there was the sovereign debt crisis,” he says. “This cost of living crisis and this potential recession approaching may mask the eventual effects of winning the World Cup.”

by Augusta Saraiva, Bloomberg


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