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By Feng Lingling

The Olympics is not only a sports event, but also a huge economic game. The "economic account book" behind each Olympic Games has attracted much attention.

On July 26, Paris will officially enter the "Olympic time". Some reports point out that the Paris "Olympic effect" will boost the French economy in the short term. However, some analysts believe that the huge cost of the Olympic Games will bring greater challenges to France, which is currently facing many "troubles".

The Olympics have always been considered an expensive investment. Whether it will ultimately be worth it for France remains to be seen.

The "Olympic Effect" has limited stimulus

French National Institute of Statistics and Economic StudiesThe report released said that the Paris Olympics will stimulate the French economy in the short term, contributing 0.3 percentage points to France's economic growth in the third quarter. It is expected that France's overall economy will grow by 0.5% in the third quarter.

The report pointed out that France's economic growth in the third quarter was mainly due to the growth in tourism brought about by the Paris Olympics, Olympic ticket sales, and event broadcasting rights and advertising revenue.

However, as the short-term effect of the Olympics will fade after the Olympics, France's economic growth is expected to fall by 0.1% in the fourth quarter of this year. According to comprehensive estimates, the contribution of the "Olympic effect" to France's full-year economic growth in 2024 is only 0.1 percentage point.

Center for Law and Economics of Sports (CDES) at the University of Limoges, FranceA research report released by the Paris Olympics shows that the 2024 Paris Olympics will bring a net economic benefit of 6.7 billion to 11.1 billion euros to the Paris region. This economic impact range has a large fluctuation, mainly due to the uncertainty in the tourism industry. In the medium and long term, the Paris Olympics will also have an economic impact of about 8.9 billion euros.

Some analysts also believe that the positive impact of the Olympics may not last long. France still faces risks in the medium and long term, such as heavy debt pressure and unstable economic policies caused by political turmoil after the general election.

Wang Shuo, professor at the School of International Relations, Beijing Foreign Studies UniversityIn an interview with China News Service, he pointed out that the Paris Olympics is still a grand event with positive significance for France. In addition to creating new employment opportunities for France, promoting tourism development and infrastructure construction, the Paris Olympics can also enhance France's international image in the current turbulent situation.

However, Wang Shuo also pointed out that the stimulating effect of the Paris Olympics is limited and cannot solve the fundamental structural problems of the French economy.

Every Olympic Games has been a project with huge investment, and the Paris Olympics, which "hopes to create the most sustainable Olympic Games in history", is no exception.

In 2017, when bidding for the Olympics, Paris Mayor Hidalgo said that the total budget for the Paris Olympics was 6.6 billion euros. However, according to data released by the Paris Olympic Committee, the current provisional bill for the Paris Olympics is about 9 billion euros. French economic research and consulting agency Asterès predicts that the total cost of the Paris Olympics will be around 11.8 billion euros. According to statistics from foreign media, the 2024 Paris Olympics will become the sixth most expensive Olympics in Olympic history.

Some analysts believe that the costly Olympic Games will make the current economic difficulties faced by France even worse.

Ding Chun, Director of the Center for European Studies at Fudan UniversityThe National Express stated that the "Olympic effect" is not only in the present, nor is it limited to the economy.

Ding Chun believes that as the Olympic Games continue to expand and facilities continue to upgrade, the cost of hosting the Games has indeed increased. However, the Olympic Games have also significantly boosted industries such as tourism, hotels, and media. In the long run, hosting the Olympic Games also has positive significance for improving infrastructure and enhancing the image of the country and the city. At the same time, the Olympic Games also provide a unique opportunity for France to conduct home diplomacy and improve relations with the world, especially its major economic and trade partners.

In Ding Chun's view, the impact of the Olympics on the French economy will be complex and long-term, and will largely depend on the actions of the French government and relevant event organizers. The effectiveness remains to be seen.

Economic ups and downs

The French economy is currently facing multiple challenges.

Wang Shuo pointed out that in the short term, France still faces great economic pressure, especially huge fiscal pressure, and has been warned by the European Union that its fiscal deficit is too high. Compared with other European countries, France's public expenditure and debt are at a high level.

Data shows that in 2023, France's public debt will account for 110.6% of GDP, far exceeding the 60% stipulated in the Stability and Growth Pact. France's deficit will account for 5.5% of GDP in 2023. International credit rating agency Standard & Poor's predicts that France's budget deficit will average 4.6% of GDP from 2024 to 2026.

According to the latest forecast released by the International Monetary Fund in July, France's economic growth rates will reach 0.9% and 1.3% in 2024 and 2025 respectively, far lower than the average of 1.7% for developed countries and the global average of 3.2%.

Wang Shuo said that the series of reform policies brought about by the Macron government will have a positive effect on the recovery of the French economy, but it will take time for the effects to appear. The current turbulent domestic and international political situation also brings uncertainty to whether the new economic policies can continue in the future.

"In addition to its own structural problems, France's economic difficulties are also closely related to the current domestic and international political situation. France's own fiscal and economic stability may also be affected by changes in the domestic and international political situation," said Wang Shuo.

Ding Chun pointed out that with the help of the government's large-scale relief policy, France has weathered the energy crisis and its economic performance is relatively better than other EU countries. However, it still faces problems such as insufficient purchasing power of the people under inflationary pressure and high government deficits. It also faces many uncertainties and internal and external risks such as the "difficult birth" of a new prime minister in the three-way race in the National Assembly, the Russia-Ukraine conflict, the Israel-Palestine conflict, and the US election.

In the long run, France needs to control inflation while solving the government debt and deficit problems that plague the economy. On the other hand, it needs to boost its economic competitiveness and find opportunities in emerging technologies and other fields.new momentum。

Source: National Express

Editor: Gao Yantang

Editor: Wei Xi