Capital Economic's Neil Shearing released a report assessing the economic impact of the football tournament about to get underway in Ukraine and Poland concluding that the competition will have an 'exceptional impact on the economic growthÓ of the countries.
However, Shearing said most of the gains have already been realized and the looming crisis in western Europe is the major determining factor for the second half of the year.
'The benefits of the tournament come via three key channels: increased investment, greater employment and higher tourist spending,Ó writes Shearing
Poland investment is estimated at around €25bn for the period 2008-12, equivalent to 1.3% of annual GDP each year. In Ukraine, investment related to Euro 2012 has amounted to €11bn over the same period, or 1.7% of annual GDP in each year.
'In both cases, investment related to Euro 2012 is much greater as a share of GDP than is usually the case with major sporting tournaments,Ó says Shearing. 'Capital spending for the 2006 World Cup (held in Germany) amounted to around €6bn, or a mere 0.3% of annual GDP.Ó
The government estimates the tournament will create 50,000-60,000 new jobs in Poland - equivalent to around 0.4% of the labour force and approximately 1% for Ukraine, according to Capital Economics, although, 'the bulk of these new jobs are likely to be both temporary and relatively poorly paid.Ó
Both economies should benefit from a surge in tourist spending during the tournament. According to some estimates, each country might receive around one million extra visitors, with each tourist spending as much as €150 a day, with spending per visitor of about €1,050. The total additional tourist spending as a result of Euro 2012 could be as much as €1bn in each country - equivalent to 0.3% of GDP in Poland and 0.8% of GDP in Ukraine.
'But this is almost certainly an overestimate. For a start, during the 2006 World Cup in Germany, average spending per visitor was only around €800. What's more, estimates that each country could receive up to one million extra visitors may prove to be too optimistic - particularly in light of recent bad publicity surrounding the tournament,Ó says Shearing. 'With this in mind, we suspect a more realistic estimate of the boost from tourist spending could be around 0.2% of GDP in Poland and 0.4% of GDP in Ukraine.Ó