Faced with the expectation that the Brazilian GDP (Gross Domestic Product) will slow down in the second half of the year and will be close to zero to zero in early 2023, the country has one more reason to hope for a victory in the Qatar football world cup.
A study by the University of Surrey, in the United Kingdom, shows that winning the FIFA World Cup increases GDP growth by at least 0.25 percentage points in the two quarters following the victory.
The conclusion is part of a survey by economist Marco Mello, which corroborates a series of previous studies.
The result is mainly driven by the increase in exports. The economist highlights as an example what happened in Brazil after winning the fifth championship in 2002. In the survey, the last six cups, from 1998 to 2018, were considered.
The work also finds that there are no significant effects on GDP growth for the host country, precisely the one that makes the most relevant investment in the competition.
A study published in 2006 showed that the host country only benefits from the competition when it is also the champion, as happened, for example, with England (1966), Germany (1974), Argentina (1978) and France (1998) — which reinforces the positive effect for the winner.
According to Mello, the article provides the first causal evidence on the economic effects of winning the World Cup. The objective is to verify if the GDP growth increases in the quarters following the victory, gathering all the countries that won the tournament and comparing them with a set of countries that did not win the cup.
The economist also uses a method to try to estimate the behavior of the GDP of the same country if it had not won the competition.
“Both approaches show that winning the FIFA World Cup significantly increases GDP growth in just the two quarters following the competition,” he says.
“More surprisingly, this effect appears to be driven by exports rather than consumption growth or capital accumulation.”
The positive effect was greatest for France (0.382 and 0.348 percentage points in 1998 and 2018), followed by Italy (0.362), Brazil (0.350) and Germany (0.263).
Spain, which won its only World Cup at the start of the 2010 debt crisis, is an exception to the rule, and experienced a contraction in GDP after winning that year’s title.
“The analysis showed that winning the FIFA World Cup leads to a statistically significant increase in GDP growth only in the two quarters following the victory”, says the work. “There are no significant effects on GDP growth for the host country.”
Brazil’s GDP for the third quarter will be released this Thursday (1st) at 9 am by the IBGE (Brazilian Institute of Geography and Statistics). In the second quarter, growth was 1.2% on the same basis of comparison. The economy should register growth of 0.6% in the third quarter, according to a survey of 35 economists consulted by the Bloomberg agency.
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