World Cup to buoy South Africa economy with image boost

JOHANNESBURG – South Africa’s economy will get a direct boost from hosting the 2010 soccer World Cup, but the likely financial spin-off of its improved image abroad may have a much bigger impact, economists say.

The euphoria of landing the tournament is likely to result in share prices rising on Monday, given the immediate boost to sentiment of hosting the biggest sporting event outside the Olympics, while the volatile rand could also benefit. Hosting what is seen as the world’s most popular single sporting event should help remove the reservations many foreign investors have about a country known more for its high crime rate than its developed infrastructure, analysts say.It should also buoy South Africa’s expanding tourism sector, which bucked a global slowdown with a 4.2 per cent rise in foreign visitors last year.”There will be a big direct injection for the economy,” said Standard Bank economist Goolam Ballim.”But the indirect impact may be more meaningful for a sustainable economic lift in subsequent years… it will help change the perceptions that a large number of foreign investors hold of Africa and South Africa.”The World Cup would pump R21.3 billion into the economy, with direct spending estimated at R12.7 billion, research from tourism specialist Grant Thornton Kessel Feinstein shows.This is fairly modest given that South Africa’s GDP amounted to R1.22 trillion last year.But the study estimates the event will also generate 159,000 new jobs — a big benefit given the fact that at least one in three South Africans are unemployed.”Rather than a once-off investment surge, the soccer World Cup’s major benefits will be found in a further change in long term perceptions regarding South Africa,” Absa senior economist John Loos said in a research note.-Nampa-ReutersHosting what is seen as the world’s most popular single sporting event should help remove the reservations many foreign investors have about a country known more for its high crime rate than its developed infrastructure, analysts say.It should also buoy South Africa’s expanding tourism sector, which bucked a global slowdown with a 4.2 per cent rise in foreign visitors last year.”There will be a big direct injection for the economy,” said Standard Bank economist Goolam Ballim.”But the indirect impact may be more meaningful for a sustainable economic lift in subsequent years… it will help change the perceptions that a large number of foreign investors hold of Africa and South Africa.”The World Cup would pump R21.3 billion into the economy, with direct spending estimated at R12.7 billion, research from tourism specialist Grant Thornton Kessel Feinstein shows.This is fairly modest given that South Africa’s GDP amounted to R1.22 trillion last year.But the study estimates the event will also generate 159,000 new jobs — a big benefit given the fact that at least one in three South Africans are unemployed.”Rather than a once-off investment surge, the soccer World Cup’s major benefits will be found in a further change in long term perceptions regarding South Africa,” Absa senior economist John Loos said in a research note.-Nampa-Reuters