While the International Monetary Fund has predicted a 0.4% decrease in the Spanish economy this year, economists note that the euphoria generated by Spain winning the FIFA World Cup for the first time ever yesterday (11 July) may boost growth by up to 0.7%.
According to economists, winning the World Cup sparks a collective feel-good factor across the nation concerned, boosting consumer confidence and household spending.
Economists at Dutch banking group ABN Amro, for example, are convinced that lifting the trophy has a positive impact on a country's economy. They note that economic growth among world champions tends to outstrip that of the losing finalist during a World Cup year.
The winner enjoys an average economic bonus of 0.7% additional growth, while the losing finalist suffers an average loss of 0.3% compared to the previous year, they write in a report entitled Soccernomics 2006.
The report credits most of the economic growth to parties organised to celebrate victory, which generate revenue and work especially in bars and supermarkets. The sale of souvenirs commemorating victory is cited as another major boost.
While the macro-economic effects on financial markets are not so great that they can turn a recession into a boom, they should not be underestimated, stresses the report.
The economists also believe that as the winning nation attracts the world's attention, it may find it easier to establish trade relations with other countries and attract new business investment at home.
The Spanish economy may well now grow, instead of contracting by 0.4% this year as previously predicted.
However, with unemployment near 20% and deep budget cuts on the horizon, economists do not foresee any major surges in the country's economy, but note that the victory could help prevent a full-year economic contraction (EURACTIV 28/05/10).