the country winning the this year’s tournament will see 0.7 per cent jump in its GDP. That’s good news for the winner.
The losing finalist, the report says, will face a downturn of 0.3 per cent in its economy.
GDP growth? Win the Cup
Sachin Kalbag
Saturday, June 10, 2006 20:47 IST
WASHINGTON, DC: Here is another reason for Brazil to lift the World Cup. The 20 billion euro Dutch banking group ABN Amro has released a World Cup soccer report which predicts that the country winning the this year’s tournament will see 0.7 per cent jump in its GDP. That’s good news for the winner.
The losing finalist, the report says, will face a downturn of 0.3 per cent in its economy.
The report, titled Soccernomics 2006, was released by the bank’s economics department recently, and analyses the economies of the winners and losers of not only the world’s most watched television event, but also of other major tournaments like the European Football Championship and Copa America. The one outside exception was Argentina whose economy slid each time it won the World Cup — in 1978 and again in 1986.
The report said that Brazil, this year’s favourite, has seen a surge in its economy each time it has won the World Cup. And sure, they are past masters at winning it — they have achieved the feat five times — 1958, 1962, 1970, 1994 and 2002. Soon after it won in 1994, Brazil’s GDP shot up from $543 billion to $705 billion in 1995.
Another example: After a slump in 2001, Brazil saw its economy crashing to a GDP of $459 billion from $509 billion the year before. But, it jumped up to $493 billion in 2002, the year it won the World Cup for the fifth time.
France, which won the World Cup in 1998, saw its economy rise by 3.48 per cent, compared with just 1.90 per cent just the year before. Germany’s growth rate, which was hovering at 3 per cent in 1989, surged to more than 4 per cent in 1990, the year Lothar Matthaus’s team beat Maradona’s Argentina in the final. The next year, it touched a 5 per cent growth rate.
The authors of the report Han de Jong, Charles Kalshoven and Ruben van Leeuwen, however, caution thus: “It wasn’t the footballers who kicked Latin America into a crisis — the impact of soccer is not as great as all that. Vice versa, however, soccer does appear to suffer when the economy is weak and to benefit from a rising economic tide. In several periods, certain countries provide proof that soccer success follows the economic cycle.”
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