(Bloomberg) -- As the Paris Olympics fade into memory and the Paralympics get set to start in the French capital, signs of the Games’ immediate benefits to the French economy are emerging.
Services expanded at the fastest pace in more than two years in August, according to S&P Global’s Purchasing Managers’ Index, as tourists flocked to sports venues and filled Parisian cafes and bars to view the events.
Bloomberg Economics predicts the Games will provide a 0.3 percentage point boost to French gross domestic product in the third quarter, “mostly through higher consumption on tickets, broadcasting and travel related services,” said analyst Eleonora Mavroeidi. “This effect, however, will be temporary and we see growth slowing sharply in 4Q.”
The upward jolt to GDP is similar to those of past summer Games, which ranged from around 0.1 to 0.4 percentage point, according to Bloomberg Economics estimates. Britain’s services PMI jumped in August 2012 during the London Games, and the economy got an immediate boost of about 0.2 percentage points, according to ONS estimates at the time.
The increase suggested “that the Olympic and Paralympic Games may have had a positive and significant effect on household spending patterns,” the ONS said then. In addition, outlays on food, drinks, hotels, transport and even other entertainment services rose, helped by more tourism.
The following year, in 2013, the government said that the Olympics had delivered a £10 billion ($13.1 billion) economic boost to the UK, equivalent to about 0.5% of GDP, as 1.4 million more Britons were playing sport at least once a week and the Olympic park was hosting music, sport and cultural events.
In a retrospective assessment of the Athens Games, the independent Foundation for Economic and Industrial Research estimated that Greek GDP would have been 2.5% lower in 2004 if not for the Olympics.
The spurt of consumer activity tied to the Paris Games will likely fizzle once the last tourists go home, and a broader slowdown across Europe is likely to catch up with the European Union’s second-largest economy. France’s slumping manufacturing sector worsened further in August, PMI figures released Thursday showed.
Assessing the longer-term benefits that may accrue from improvements in infrastructure and other investments carried out in the run-up to the Paris Games — such as €1.4 billion ($1.6 billion) spent to clean up the Seine — will take years.
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