FIFA World Cup Impact on Global Economy

the economy of world cup
The economy of World Cup
2010 FIFA World Cup Final is approaching, and no matter how you love or hate football (soccer,) you must realise that FIFA World Cup has proven to have significant impact on global economy and business.

Hosted in South Africa, the 2010 FIFA World Cup Final on July 11, 2010 is all about the Netherlands vs. Spain. The football national team of the respective countries will battle for probably the most important sporting event in the world.

Not only respect gained in football world, the winner of World Cup Finals will also see annual economic growth, as much as 0.25 percentage point, as reported by Bloomberg BusinessWeek, largely thanks to increased consumer spending.

From the same article, it is said that winning the World Cup Final will boost Dutch consumer spending on 2010 700 million euros (or $887 million) – approximately 0.25 percent.

For Spain, winning the FIFA World Cup could drag them out from the country’s worst recession in decades, as reported by The Wall Street Journal.

As for South Africa, host the 2010 FIFA World Cup has also enjoy a boost in its economy, particularly in term of getting more interest from foreign investors, as reported by The Atlanta Post. South Africa’s ability to host a successful FIFA World Cup also revved-up trust from those investors.

Interestingly, the negative impact of poor performance during the World Cup is also significant. For example, Italy’s poor 2010 FIFA World Cup performance (a surprising early exit from the Group Stage) potentially lose its economy to nearly $170 million, as reported by LA Times Blog.

Here’s a nice explanation from Wikipedia about the Economics of the FIFA World Cup, with some emphasis added:

The FIFA World Cup has a significant impact on the global economy. FIFA, football’s global governing body with 204 member countries, is beginning to view itself as a global “big business”. This self image is no assumption; it has been proven throughout various World Cups that this football tournament has a global impact.

Furthermore, the wiki gives you a nice picture: World Cup sponsorship has risen from 2 billion dollars in 1984 to 16.6 billion dollars in 1996 – with approximately 36 billion viewers worldwide, the sponsorship program is, indeed, profitable for the sponsors, as well as the host country.

Big impact, indeed

Not only the impact on the winner’s country, the World Cup has also impacted global economy greatly, also in the form of consumer spending, especially anything related to football (soccer.)

However, spending is not the only indicator of positive global economy outlook; psychologically, countries that are performing well during the World Cup would also enjoy positive outlook on the people, thus driving the business world to move forward like a well oiled machine.

What’s your view on this? Please share your thoughts by commenting on this article.

Ivan Widjaya
A football (soccer) fan