FRANCE: WORLD CUP VICTORY… A FREE-KICK FOR GROWTH ?

The French were jubilant after their World Cup victory on Sunday. Even after the euphoria has worn off, everyone continues to think and dream about the victory - and could even be tempted to see this as a good omen for the French economy, thinking that the Wo rld Cup victory could stimulate growth by boosting consumption. This would be most welcome as, contrary to the French flags being waved proudly in the street, household consumption has been flagging in early 2018 . Unfortunately, the impact on the French economy is likely to be very limited. There is actually little hope that the shared happiness following the victory for France will succeed in restoring the purchasing power that households lost in the first quarter. As a result, it is likely that the spending generated in France during the matches and the festivities will only be used as a substitute for other spending. Ultimately, this will probably be a zero-sum game, as some sectors have benefited from temporary changes in consumption patterns at the expense of others ( for example, beers and /or rosé wine and pizza have done well) . It is nevertheless possible that even if it will not revitalise French growth directly, the World Cup victory will at least temporarily boost gross national happiness by restoring household confidence as well as Emmanuel Macron’ popularity rating. Beyond these fleeting gains, France’s proven capacity to spontaneously organise sports and festive gatherings throughout the country in a euphoric atmosphere is a good omen in the run-up to the Olympic Games that Paris will host in 2024, particularly in terms of convincing foreign investors that may have been cautious until now. The true winners in the short term as in the long term are definitely the players themselves: given their talent, they are now guaranteed a bright future . T his victory was welcome, if simply for the joy and the sense of cohesion it created. Its macroeconomic repercussions could remain anecdotal even if it helps improve France’s brand image after the strikes in the spring .