These are World Cup’s implications on Qatar’s economy
A few days before the World Cup, organized by the International Federation of Football Association (FIFA) and hosted by Qatar for 29 days, starts on the twentieth of this month.
Qatar and the Gulf are expected to reap many economic repercussions from this global event, which may have the highest revenues in the history of World Cups.
What are these benefits?
Fitch Solutions said in a report that the World Cup will have an immediate positive impact on Qatar’s economy.
Preparations for the event – and the World Cup itself – are expected to boost Qatar’s real economic growth to 5.2 percent in 2022 from 1.5 percent in 2021.
Qatar will record the fastest annual growth since 2014.
The agency expects Qatar to welcome 2.2 million visitors in 2022, above 2019 arrival levels, including about 1.2 million expected to arrive during the global event.
According to Fitch forecasts, foreign visitors may equal about 40 percent of the Qatari population, compared to 2.5 percent and 0.7 percent during previous World Cup tours that took place in Russia and Brazil respectively.
The World Cup would boost spending either by visitors or residents, benefiting the hospitality, residential, dining, and retail sectors.
The authorities will also boost their spending on health and security services during the event.
The benefit is not limited to Qatar only, as the repercussions of the event will affect neighboring countries, as Qatar alone cannot accommodate all visitors associated with the World Cup.
This prompted Qatar Airways to reach agreements with neighboring countries to give fans the option of staying there and travel to Doha during match days.
Inflationary pressures will worsen
On the other hand, demand factors will exacerbate existing inflationary pressures, which will lead to a rise in the inflation rate to 4.4 percent year-on-year in the fourth quarter of this year.
“Inflationary pressures from World Cup will put Qatari inflation on a higher trajectory. So, we expect that after an average of 4.7 percent, inflation will remain above the trend in 2023, averaging 2.5 percent,” according to Fitch Solutions.
Fitch also expects a quarter-on-quarter decline in gas export growth during the gaming period as a result of growing domestic energy consumption.
The global event will cause strong quarterly increases in non-oil activity in the fourth quarter of this year compared to the same period in previous years.
“Standard & Poor’s”
Standard & Poor’s Global Ratings said the World Cup would give an additional boost to Gulf economies in the near term.
Gulf economies, which generate high revenues as a result of higher oil prices, are poised to make further gains from this month’s World Cup.
Highest revenue in World Cup history
This year’s World Cup is expected to achieve the highest revenue in the history of the World Cup.
According to a source familiar with the matter, FIFA has already sold broadcasting rights, about 240,000 hospitality packages, and 3 million tickets for the tournament.
The source explained that marketing sales in the period from 2019 to 2022 will exceed the budgeted figure by about $1.8 billion.
The same source pointed out that the tournament’s revenues will exceed $6.4 billion, a figure targeted by FIFA over the past three years, as those revenues will be used for sports development activities around the world.
The report also predicted that Qatar would add nearly $17 billion to its economy while fans are present throughout the tournament.