Study: German Economy Set For World Cup Boost

The German bank predicts that the soccer spectacle, which is expected to attract hundreds of thousands of visitors to Germany in June and July next year, will boost business and generate as much income in 2006 as economic reforms planned by the new government.

"The World Cup could result in an economic growth impulse of around 0.3 percentage points," Stefan Steib, head of research at LRP told a news conference. LRP expects German gross domestic product (GDP) growth of 1.7 percent next year with the tournament forecast to contribute much to that growth.

The influx of tourists into Germany is predicted to add an extra five million overnight stays in hotels and youth hostels, which, in turn, would contribute to an estimated 1.5 billion euros ($1.77 billion) worth of direct tourism-related spending, according to LRP. This figure could go as high as 2.4 billion through the indirect effects of the World Cup.

Fans expected to spend a billion euros on goods

As well spending for accommodation and food and drink throughout their stay, the World Cup tourists are expected to spend an estimated one billion euros on sports equipment and other paraphernalia while in Germany. Other sectors, primarily transport and communications, might see an equally big revenue increase, the study showed.

German sports giant and leading soccer equipment manufacturer Adidas, which produces the replica kit for the German national team among others, is likely to be one of the biggest earners from all the sports spending, along with domestic rival Puma and US competitor Nike.

Audiences to boost broadcasters and manufacturers

Other German companies expected to benefit will be Premiere, which has live broadcasting rights to all World Cup matches. The pay-per-view broadcaster could add up to 370,000 new subscribers in 2006, LRP said. The worldwide TV audience is estimated at an average of half a billion people per match.

But it won't just be broadcasters who will benefit from the huge armchair audiences. The World Cup is expected to lead to increased sales of flat-screen and LCD TV sets, boosting revenues of consumer electronics makers including Philips, Sony, Samsung and possibly up-market Bang & Olufsen, LRP said.

With almost three million tickets expected to be issued, German distributor CTS Eventim, Europe's leading cultural and sporting events ticket company, is another potential World Cup beneficiary mentioned in the LRP study.