World Cup won’t boost US or European economies, experts warn
The upcoming Fifa World Cup is unlikely to deliver significant or lasting economic growth for its three hosts and the European market, experts have warned.
The quadrennial tournament – being held across the United States, Canada and Mexico – is set to “generate excitement far more reliably than sustained economic transformation”.
Natixis CIB’s report, Beyond The Game: The Economics of the 2026 Fifa World Cup, notes that Mexico could see modest 0.1-0.2 per cent growth over the tournament, but the United States is unlikely to see a major boost across either the travel and hospitality sectors.
“In this context of negative sentiment from international travelers and weaker hotel demand,” the report reads, “the overall effect of the World Cup on the US economy will likely remain muted.”
The ongoing conflict in Iran has battered many of the world’s leading economies, including across Europe, with any gains expected from Brits boozing well into the night being offset by other flatlining sectors of the economy.
And major events do not always result in booming growth.
World Cup flatlining?
“We cannot compare the World Cup with the London Olympics,” Hadrien Camatte and Bastien Aillet of Natixis CIB told Morning Wire. “The effect of the London Olympic and Paralympic Games on British growth was estimated to be between 0.2 and 0.4 percentage points in Q3 of 2012, primarily due to ticket sales, with more uncertain effects on other tourism sectors [but the] UK GDP contracted in the following quarter (-0.2% in Q4 2012).
“We expect a very limited economic impact for host countries because investment for the World Cup has remained modest, notably in Mexico and the US, due to well-established infrastructure including stadiums, accommodation, and transportation networks.”
France are favourites to win the Fifa World Cup, ahead of Spain and England. Brazil and Argentina feature as the only non-European teams in the top 10.
“For France, we believe the World Cup is unlikely to generate a significant positive confidence shock among households or businesses,” Camatte and Aillet added.
“In France’s case, the study of data between 1998 and 2018 does not reveal a real improvement in household confidence, despite two victories. It is likely that this will be similar for England.”