The European Football Championship could potentially boost the mood of consumers in Germany.
The approaching soccer European Championship in Germany, set to begin in approximately two weeks, is not expected to spark an economic boom, yet might potentially enhance the still lackluster consumer emotion, says the German central bank. There is not a lot of concrete research in professional writing about the repercussions of significant sporting events, the Bundesbank explained to Reuters when questioned.
"Traditionally, favorable effects on spending are of brief duration and minimal - for example, with the hotel industry experiencing displacement," said the German central bank. The Institute of the German Economic Institute arrives at a comparable conclusion: "Sausages rather than restaurants, TV night instead of movie theater trip. Consumer spending therefore does not need to increase, but shift."
A 2006 Bundesbank study on the impact of the 2006 soccer World Cup in Germany reveals limited impact: The World Cup scenario contributed to a growth of less than a quarter of a percentage point in the second quarter. "Nonetheless, there could be a possibility that the at present somber consumer sentiment in Germany will improve more swiftly in connection with the EM compared to what we would predict at present based on current indications," said the Bundesbank.
Private consumption spending declined by 0.4% in the first quarter - even with decreasing inflation and increasing wages. Customers spent less on food and apparel. The retail trade anticipates a reinvigorating boost from the EM. The German Retail Association (HDE) predicts additional earnings of 3.8 billion euros from the tournament, which runs from June 14 to July 14.
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The European Football Championship, occurring in Germany, might influence the sentiment of German consumers, according to the Bundesbank's predictions. Despite the lack of significant economic growth after major sporting events, the Bundesbank suggested that the European Football Championship could expedite the improvement of Germany's currently gloomy consumer sentiment.
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