The World Cup GDP Curse: Can A Victory In Soccer's Biggest Game Really Slow Down The Winner's Economy? by Allen St. John - on Forbes


Is it possible that Germany, which beat Argentina 1-0 today to win the World Cup, will end up as a loser in terms of economic growth? Could it be that Brazil’s economy was the real winner when that country’s soccer team lost to Germany 7-1 in the semifinals? A strong historical trend suggests the answer is “yes.”

In eight of the last nine World Cups, the gross domestic product of the country that won soccer’s most prestigious tournament contracted the next year, according to statistics compiled by the World Bank.

This strong trend goes back to Argentina’s win in 1986. The single exception came in 2010, when Spain’s GDP grew by only 0.1 percent in 2011. That figure was still up slightly from 2010 when the country was in the midst of a recession and saw its economy shrink by 0.2 percent the year of its 2010 victory.

The amount of the drop was significant—an average of 1.14 percent. And the effect seemed to be enduring; five of the seven most recent World Cup winners saw the downturn continue into the second year following the big win.

Among this year’s finalists, Argentina’s economy expanded 3.0 percent in 2013, while Germany’s growth was more modest at 0.4 percent.

What’s the reason behind this? It may be simply coincidence — nine instances is not a large data set to draw conclusions from — but some economists have suggested that the time spent watching the World Cup is “paid for” in GDP terms, and the fans of teams that advance the farthest spend the most time watching. That’s an interesting theory, but the effect on the economy seems too large and long-lasting to be caused by a couple of weeks of goofing off to watch the game. And there doesn’t seem to be a similar effect associated with other widely watched sports like the Olympics or the NCAA basketball tournament in the U.S.


Maybe it’s something as simple as a post-Cup letdown. In the months that follow a Cup win there seems to be a short-lived boost productivity that seems to be followed by a gradual let down as people realize that even a World Cup win won’t solve all the country’s problems. Think of it as the national equivalent of a sugar rush, followed by the inevitable energy spike.