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The economy of the World Cup champion will be the real winner as the winning country will get a boost from consumers after the world's most-watched soccer match, economists say.
Triumph in the final could add as much as 0.25 percentage point to annual economic growth for the winning team's country from increased consumer spending, according to ABN Amro Bank economist Hein Schotsman in Amsterdam. For Spain, that could mean expansion this year instead of a projected contraction.
The all-European final is giving people something to cheer about in the middle of the sovereign-debt crisis that's rocking the continent. Both the finalists could use it. The Dutch, still wrestling with the bailouts of the nation's biggest financial services companies, saw their government fall in February, while one in five Spaniards is out of work, the highest jobless rate in Europe. "It would be good for the Dutch economy if the Netherlands wins," ING Group chief executive officer Jan Hommen said.
"Becoming world champion gives a good collective feeling, which leads to more consumer spending, that could have a positive impact on the economy of between 0.25%to 0.5%." Neither the Dutch nor the Spanish has won the quadrennial tournament before, and both already are benefiting from increased exposure internationally. Spain is making its first appearance in a World Cup final after beating three-time champion Germany in their semi-final on July 7. The Netherlands has been runner-up twice, the last time in 1978 against Argentina.
"We should be proud, such a small country!" coach Bert van Marwijk said after his team won their semi-final by beating Uruguay.
A World Cup victory may boost Dutch consumer spending this year by 700 million euros ($887 million), or 0.25%, said Charles Kalshoven, an economist at ING in Amsterdam. "The economic recovery still leans on restocking and exports, with domestic demand lagging, so increased consumer spending would be very welcome now," Kalshoven said. If the Dutch win, "every corner of the world will be reminded the Netherlands exists, where it is and that it's home to 11 great players," ABN's Schotsman said.
The Dutch economy, the fifth-largest in the euro area, is set to expand 1.25% this year, the government forecasts, while Spain, whose GDP is twice as big, projects a 0.3% contraction. The European Union in May estimated Spanish GDP will fall 0.4% this year, while the Netherlands will see 1.3% growth.
Italy's triumph over France in the 2006 World Cup led ABN Amro to raise its forecast for growth in the Italian economy that year by 0.2 percentage point to 1.7%, saying "happier consumers spend more." In the end, GDP expanded 2% in 2006, a six-year high, according to EU data.
"Dutch consumers, traditionally conservative spenders, will become euphoric if the country wins the World Cup, boosting economic growth as they step up spending," said Schotsman. On the other hand, "Spain could prevent full-year economic contraction by winning," said Schotsman, the author of an April report titled "Soccernomics 2010" that predicted a Spanish triumph this year.
For Spain, which emerged from an almost two-year recession in the first quarter, the benefits may not be as apparent.
"In terms of our international standing, it was very positive" for Spain to reach the final, said Javier Segura, chief economist at Caixa Catalunya in Barcelona. "But I'm not sure we can go as far as to say that this would have an impact on GDP."
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