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Olympics 2024: France’s growth set to increase by 0.3 points, INSEE says

Olympics 2024: France’s growth set to increase by 0.3 points, INSEE says

Olympics 2024: France’s growth set to increase by 0.3 points, INSEE says

Two weeks before the opening ceremony on the Seine, INSEE is taking a decisive step: national statisticians calculated on Tuesday that hosting the Olympic and Paralympic Games in France should lead to an additional 0.3 points of GDP growth in the third quarter.

“The impact of ticket sales and retransmission rights revenues will be around +0.25 points of GDP, to which must be added the spillover effects, especially in tourism (accommodation, food and transport), as well as what the bonuses for civil servants represent during the Games,” with more “uncertain” economic effects, but which could lead to an additional quarterly growth of 0.05 points, the National Institute for Statistics and Economic Research (Insee) points out in its latest economic report.

Overall, GDP will grow by 0.5% in Q3 and by 1.1% for the whole of 2024. “Activity will slow down at the end of the year,” adds INSEE, which forecasts a contraction of 0.1% in gross domestic product (GDP) in Q4.

An effect comparable to the London Olympics

The impact of the Olympic Games (26 July – 11 August) and Paralympic Games (28 August – 8 September) on the economy will therefore be comparable to the impact of the London Games, which contributed to growth of the British economy by 0.2–0.4 points of GDP in the third quarter of 2012, with overall growth of 1%.

While economists are often reluctant to compare the impact of different Games, INSEE suggests a parallel between the 2012 and 2024 Games. “London and Paris are two major European capitals with a strong tourism economy and developed urban infrastructure,” the publication says. The statistical agency, on the other hand, rejects “less relevant” comparisons with the Rio de Janeiro Games in 2016 or the Tokyo Games in 2021.

For the Paris Games, the main growth impetus comes from ticket sales (+0.15 points of GDP, or 1.2 billion euros in revenue for the organizing committee) and broadcasting rights (+0.1 points of GDP, or 750 million in revenue), which INSEE decided to record in the third quarter.

Very timely support

Even if ticket sales for the Games began in 2023, they are in fact measured “at the moment they are consumed by the public”, that is, during the Olympic and Paralympic events, INSEE explains. The same logic prevails for broadcasting rights. According to forecasts, the boost given by the 2024 Olympic Games to France’s economic growth will only be temporary and will not be repeated in the fourth quarter.

While the event should lead to increased consumption in certain sectors (housing, catering, transport), it will have little impact on growth in the third quarter.

INSEE gives the example of television purchases, which sometimes tend to increase during major sporting events such as the World Cup. These purchases certainly support consumption, but they often come at the expense of other spending, which offsets their beneficial impact on economic growth.

Source: Le Parisien

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