As the excitement of the Paris Olympics begins to fade and the city prepares for the upcoming Paralympics, early indicators suggest that the Games have provided a significant short-term boost to the French economy.
In August, services in France experienced their fastest expansion in over two years, according to S&P Global’s Purchasing Managers’ Index (PMI). This surge was driven by an influx of tourists who filled sports venues, cafes, and bars across Paris to enjoy the events.
Bloomberg Economics forecasts that the Olympic Games will contribute approximately 0.3 percentage points to France’s gross domestic product (GDP) in the third quarter of this year. This increase is primarily attributed to higher consumer spending on tickets, broadcasting, and travel-related services. However, analyst Eleonora Mavroeidi notes that this effect is expected to be temporary, with growth likely to slow sharply in the fourth quarter.
This GDP boost is consistent with the economic impact of previous summer Olympics, which typically added between 0.1 to 0.4 percentage points to the host nation’s economy, according to Bloomberg Economics. For instance, during the 2012 London Games, Britain’s services PMI saw a significant rise in August, and the overall economy received an estimated 0.2 percentage point lift. The Office for National Statistics (ONS) reported that the Games positively influenced household spending, particularly in sectors like food, beverages, hotels, transport, and other entertainment services, bolstered by increased tourism.
In 2013, a year after the London Olympics, the UK government reported that the Games had generated a £10 billion ($13.1 billion) economic boost, roughly 0.5% of GDP. This long-term impact was partly due to increased sports participation and the continued use of Olympic venues for various events, contributing to sustained economic activity.
Similarly, a retrospective analysis by the independent Foundation for Economic and Industrial Research highlighted that Greece’s GDP would have been 2.5% lower in 2004 without the Athens Olympics, underscoring the Games’ substantial economic impact.
Despite the initial surge in economic activity linked to the Paris Olympics, it is expected that consumer spending will normalize as tourists depart and the broader European economic slowdown catches up with France, the EU’s second-largest economy. Notably, France’s manufacturing sector continued to decline in August, as reflected in the latest PMI data.
The long-term economic benefits from infrastructure improvements and other investments made in preparation for the Paris Games, such as the €1.4 billion ($1.6 billion) project to clean up the Seine, will take years to fully assess and realize.
