As the US consumer takes his foot of the pedal, and reports circulate about the levels of debt in the UK, the global economy needs those old stalwarts of the economic scene, Germany and Japan, to take up the slack. And perhaps the English football team could do their bit, by losing a penalty shoot-out to Germany.
Just imagine, it’s the World Cup Final and the teams are still level after extra time. Germany has scored all five penalties, and Wayne Rooney steps up to make it five a piece, or to cede victory to Germany, again. The English should be praying for the metatarsal injury to play up, putting Rooney off his stride, and forcing him to emulate the likes of Pearce, Woddle, Southgate and England’s other famous penalty missers. Apparently, a German victory in the World Cup will do wonders for consumer confidence. In 1998, for example, the French economy surged after the Gallic victory, whereas with the Brits immersed in debt, the last thing the UK needs is a boost in confidence.
A victory for the host nation inspiring a German feel good factor aside, Capital Economics has calculated that the actual tournament is likely to contribute around 10 billion euros to the German economy. It may sound a lot, but, in reality, this will only boost GDP by around 0.2%.
Apparently, though, the tournament is likely to have the effect of boosting consumer expenditure on certain items - LCD TVs, for example. This will lead to a stronger rise in GDP during the quarter that sees the football - between 0.2% and 0.5% of GDP - followed by a fall in the following three-month period.
While the actual competition will have a relatively modest impact on the economy, the preparation is more important. The esteemed economic forecasting group, reckons the biggest impact of the World Cup on the Germany economy has already happened. Construction has seen an injection of 6.2 billion euros, upping GDP by 0.3%.
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