Can the Russian economy be raised with the help of the 2018 FIFA World Cup? In the run-up to the World Cup, pessimistic assessments of experts are enough: they believe that nothing but long-term losses will bring it to the country. But the government calculated that the total effect for the Russian economy from the World Cup will be 1% of GDP. We tried to figure out what to expect from the world football championship on the economic field - victory or defeat.
To calculate the economic effectiveness of the upcoming World Football Forum - the task is not trivial. At least because it's just so easy to compare income and expenses will not work. For example, there are many sources of these very expenses, and each has its own accounting department.
Something comes from the federal budget, something from the budgets of the involved subjects of the Federation, something is invested by private sponsors, both domestic and foreign, and something is financed by the International Football Federation (FIFA), in fact, and conducting the championship of the world.
The directions of these investments are also completely different: stadiums and sports infrastructure, roads and hotels, which are needed not only for the 2018 World Cup, travel, accommodation and accommodation of teams, souvenirs and paraphernalia ...
No less problems and taking into account future profits: for example, the proceeds from the sale of tickets are considered easy, the amounts spent in Russia by visiting tourists are already more complicated, and the hotels and roads constructed will pay off for many years to come. In general, while in the course are approximate estimates from different analytical groups and experts, which give a very colorful picture of future profits and losses.
Analysts McKinsey calculated that only 1.2 trillion rubles was spent on preparations for the 2018 World Cup. Almost half of this amount - 630 billion rubles - made investments in the construction and reconstruction of stadiums and airports.
In dollars, the total cost of preparation for the tournament in Russia is estimated at $ 13.2 billion (at the average exchange rate for 2013-2017). It will become the most expensive World Cup, which, however, fully corresponds to the general trend: each subsequent mundial is more expensive than the previous one. South Africa spent $ 6 billion for the 2010 World Cup, for Brazil the cost of the 2014 World Cup exceeded $ 11 billion.
As for the effectiveness of investments, in monetary terms, Russia's GDP growth for the investment period 2013-2018 will amount to 867 billion rubles. Experts also highlight the long-term economic effect associated with the expected growth of tourism and infrastructure development. According to preliminary estimates, it will amount to 150-210 billion rubles. a year on the horizon of five years, the study said.
The overall effect of 86% is on the impact of investment and operating expenses (746 billion rubles.), While the peak of investment in sports and transport infrastructure fell in 2016-2017. Another 14% in the combined effect (121 billion rubles.) Will provide an influx of tourists directly during the championship.
In addition, arrangements for the preparation and holding of the 2018 World Cup allowed to create 220 thousand new jobs, mainly in the construction and tourism industries. Thanks to this, according to the authors of the study, the labor incomes of the population increased by 414 billion rubles. in aggregate for the years 2013-2018. In addition, the championship for another five years can annually provide 140-200 thousand jobs, 60-90 billion rubles. additional income to the population, 20-30 billion rubles. tax revenues to the budget and 100-150 billion rubles. revenues to small and medium-sized businesses, calculated in McKinsey.
However, the conclusions of another large-scale study on the economic consequences of the World Cup-2018, conducted by analysts of the international rating agency Moody's, are by no means so complimentary to Russia. They show that the economy of our country will receive only a short-term economic benefit from the planetary championship.
"A significant part of the economic impact is already felt at the expense of infrastructure costs, but even in this part the effect is limited. Investments in the championship in 2013-2017 amounted to only 1% of the total investment, "the agency said in a review.
"The games will last only one month, and the corresponding economic incentives dimmer against the backdrop of the Russian economy, which is estimated at $ 1.3 trillion," explained senior vice president of the agency Christine Lindow.
According to her, Moody's does not believe that the World Cup will make a significant contribution to the overall economic growth of the country. At the same time, the authors of the study acknowledge that in the host cities of the World Cup 2018 there has been an improvement in transport and communal infrastructure, with Mordovia and the Kaliningrad region benefiting most from this. But the costs of the football championship had a negative impact on public finances in St. Petersburg and the Samara region, which led to an increase in the total debt of these regions.
In anticipation of the consumer boom
The main and obvious profit of Russia from the forthcoming world championship should be brought by tourists. This year the development of tourism will increase GDP by an additional 121 billion rubles, in the next five years - by 40-70 billion annually, according to a report by McKinsey. The flow of tourists from abroad to regions hosting the 2018 World Cup will grow by 14-18%, Russian tourists - by 10-26%. During the World Cup 2018, the revenue of 4-5-star hotels can grow to 40%, 3-star - up to 15%.
Will win the championship and the turnover at the expense of the tourists and fans who arrived: they need something to eat somewhere, to live, to buy souvenirs. The Football World Cup will accelerate the growth of the Russian economy by 1-2 percentage points during its holding in June and July. About 570 thousand foreign tourists will come to the World Championship in Russia, the authors of the study predict, based on data on ticket sales for February 2018. Foreign fans will come to Russia on average for 12 days. According to experts, foreign fans will spend about 141 billion rubles a month in Russia.
During the World Cup in Russia, the retail trade turnover is expected to grow dramatically. Dafna Kasriel-Alexander, an analyst with Euromonitor, identifies several areas of the consumer market, whose revenues are growing during major sports tournaments: alcoholic and soft drinks, fast food and other takeaway food, snacks, fresh meat, as well as HDTVs, with the host country, including souvenirs, smartphones.
"For many consumers, the FIFA World Cup means a temporary change in their habitual way of life and consumer habits," Kasriel-Alexander notes. "Work and family for a few weeks go into the background, and the main life and consumption are concentrated around the group watching TV." This is what, according to the expert, becomes the determining factor in the consumer market for a whole month - fans occupy bars, buy in stores beer and snacks to organize home parties, grow sales of energy drinks and protein products to overcome the consequences of libations before the television screen ...
Food retailers, hotels and transport companies will receive a temporary increase in revenue for the period of the mundialya, stated in the study Moody's. "But the effect will be one-time, which will not lead to significant changes in business indicators and credit profiles of companies," the authors warn. Moscow airports will gain the most in the transport sector due to the increase in passenger traffic, including after the event. But the visible effect on the banking sector is not expected at all.
But the 2018 World Cup can somewhat accelerate inflation in Russia, believes deputy director of the development center of the Higher School of Economics HSE Valery Mironov. According to his forecast, the championship will increase the price increase for an additional 0.2-0.3 percentage points. Thus, during the period of the matches, inflation in annual terms will be at least 2.5%.
Fans arriving in Russia will create demand for the national currency, but the influence of the world championship on the ruble exchange rate will be insignificant compared to other factors. "In terms of the influx of money from football tourists in June and July, the dollar may weaken by 0.5-1 ruble, but on the whole, the factors are in favor of not a leap but moderate weakening of our currency," Mironov said.
One of the main economic achievements and at the same time the problem for the country - the organizer of the mundial - is the infrastructure built. Super-modern, very roomy and very expensive stadiums - it's fine for the world championship, but what to do with them next? After all, their content alone costs millions of dollars. The treasury of far from every subject of the Federation will sustain this.
Arkady Dvorkovich recently, while he was his vice-premier supervising the preparations for the 2018 World Cup, assured that the infrastructure built for the championship in our country "is definitely not redundant." He expressed the hope that teams of the Russian Premier League will compete in these stadiums. But so far, at least in several cities - the hosts of the championship, there are no such teams: in Saransk, Kaliningrad, Sochi.
It is unclear why FM facilities should be in demand later, Raiffeisenbank analyst Stanislav Murashov is surprised. "There are a lot of examples when infrastructure objects to olympiads or world championships were not used in any way or were used forcibly and not for their intended purpose. The effect is somewhat overvalued, "the expert notes.
But the head of the Institute of Globalization Problems Mikhail Delyagin is confident that all sports facilities in the future have a chance to bring benefits. "As for the profit, then, of course, all these facilities will generate it after the World Cup is over. This can be seen from Sochi. After the Olympics, all objects are loaded and work normally. We must make them free for training and athletes, and amateurs. It is necessary to ensure maximum access of people, to popularize sports so that they are as busy as possible. Then they will be useful. Given our shortage of sports facilities, this is a good business and will bring benefits, "the expert is convinced.
Score and pay back
So will the upcoming world championship pay off? The answer to this question is worth searching in history, having analyzed the effectiveness of previous championships. FIFA estimates indicate that in the last quarter of a century the costs of a world football tournament could once again be recouped by the United States in 1994 and France in 1998.
At the stage of filing the application, the United States already had 30 ready-made stadiums that met all the requirements of the International Football Federation. As a result, America spent a mere penny - about $ 30 million - to improve infrastructure. Not surprisingly, the championship paid off before the completion, only tickets brought more than $ 60 million. The total long-term economic effect by various estimates was from $ 3 to $ 11 billion.
The expenses of France at the World Championship were much higher - $ 1.6 billion. Of these, over $ 0.6 billion was spent on equipping and updating 10 stadiums. Nevertheless, for France also the championship turned out to be profitable, the total economic effect was expressed in GDP growth of 1%.
True, the investment analyst Global FX Vladimir Rozhankovsky considers it more correct to compare the upcoming Russian championship not with the championships held in the last century in developed countries, but with the relatively recent (2010) mundialem that was hosted by South Africa - our "colleague" in the BRICS. So, the costs of the African country for sports facilities and infrastructure amounted to $ 300 million, and in general for the World Cup was spent $ 3.5 billion.
The direct income of South Africa from the World Cup amounted to about $ 3 billion. Indirect income, according to various estimates, brought in an additional $ 1 billion. Thus, the net surplus amounted to about $ 500 million. For South Africa, this amount is quite significant. But most importantly - the championship still ended for the country in positive territory, and not in the red, the expert points out.
What can bring profit to the Russian mundialyu? Vladimir Rozhankovsky painted the answer to this question on the points:
1. Sale of tickets for matches - the planned income of about $ 5-6 billion.
2. FIFA's contribution could be about $ 1 billion.
3. Revenues from foreign tourists are expected around $ 5 billion.
4. Sale of TV and radio channels the right to broadcast the competitions - about $ 5 billion.
Revenue from attracting sponsors for their advertising is also $ 5 billion.
Sale of souvenirs with symbols - $ 200 million.
In total, according to the expert's calculations, direct incomes are $ 21-22 billion. Taking into account the fact that the costs are estimated at somewhere in the $ 13 billion, in the optimistic scenario the revenues will exceed expenditures by $ 8-9 billion, which corresponds to approximately 0.7-0, 8% of GDP.
However, over time, the economic gains can still increase. Assessing the potential payback of the upcoming World Cup, Oleg Safonov, managing director of BCS Ultima, drew attention to the fact that in Russia 65% of all investments were invested in strategic projects that are significant for the country. "Let it be forced, but the planning horizon switches from quick money to long-term development," the expert said.
According to him, while we can only talk about the indirect economic effect, formed due to investments in stadiums and other infrastructure projects for the championship. "This is just about 1% of GDP. Positive effect on the economy in the future will have new roads, airports and other transport infrastructure facilities. As for the direct effect on GDP, it is possible, but very limited - within 0.2-0.3% in 2018-2019. "
If we sum up the calculations and statements of the experts interviewed by the "MK", it turns out that the Russian economy from the World Cup 2018 should remain in the payoff: an increase in the GDP by different estimates is expected from 0.2% to 1%. Will these more or less optimistic calculations come to life? Waiting for an answer to this question was not long. But in general, the chances of the domestic economy to succeed at the home world championships should perhaps be assessed more highly than the chances of winning our players.