My World Cup predictions ... based on GDP
When making predictions for the World Cup, most experts and fans look at the talent on the field, taking into account factors such as the players' skill level and their age, the coach, and team experience.
This (self-proclaimed!) football expert, however, has decided to make predictions based solely on one factor: Gross Domestic Product for each country, in the interests of fun.
The simplest explanation of a country's GDP is the total value of goods and services produced by that country during a period, say a year. GDP is used to gauge economic progress and its use as an indicator of economic health can be traced back to the 1600s when a little-known man, Sir William Petty, argued the value of what was produced needed to be calculated for the government to know what taxes to collect.
That's the history out of the way. Now it's time to ask: "Why would I use GDP for football predictions?". Well, there COULD be a relationship between the resources teams and players are provided and their country's economic wellbeing.
We won't be able to properly test my theory until the end of the series, but we can take a look at my predictions in the group stages round.
I have organised teams based on GDP and then chosen the 16 teams I think will advance to the next round.
The tournament begins with "group stages". Eight groups (A-H) of four teams will see the number of teams reduced to 16 for the final stages.
The strongest group, based on my GDP-related approach, is Group F, without question. Germany, South Korea, Mexico and Sweden amass an aggregate GDP of just under $7tn. The weakest group is Group D, which is a bucket of frontier market economies with Argentina at the top. The total GDP in Group D comes to $1.09tn.
The teams I have predicted will advance to the next round are in bold below. For a deeper look, read on...
Who will advance? Russia and Saudi Arabia
Who will be eliminated? Egypt and Uruguay
Why? Forget about Alan Dzagoev, Russia’s dynamic striker on the field, this one is about oil. Russia ($1.53tn) and Saudi Arabia ($683bn) both thrive off of their immense oil production - 40% of Russia’s federal budget revenues are derived from oil revenues, while Saudi Arabia’s oil industry totals 46% of total GDP.
Who will advance? Spain and Iran
Who will be eliminated? Portugal and Mexico
Why? Iran’s economy is 50.4% greater in size than that of the Republic of Cristiano Ronaldo (Portugal). Spain won the tournament in 2010, but with the recent no-confidence vote in Parliament that ousted Prime Minister Rajoy just a few weeks before the opening whistle, it will be interesting to see if the new controlling party will roll back some of the supply-side reforms that have caused speedy growth on the part of the Spaniards in the last seven to 10 years.
Who will advance? France and Australia
Who will be eliminated? Denmark and Peru
Why? There is a $1.1tn difference in economy size between Australia and Denmark. Over the past 18 months, exports have driven the Australian economy upwards, adding 1.3% to GDP growth; not good for the Danish. In France, the business-friendly President Emmanuel Macron is undertaking strenuous labour reforms while at the same time cutting taxes for the wealthy with the hope of boosting investment.
Who will advance? Argentina and Nigeria
Who will be eliminated? Croatia and Iceland
Why? Some thought that the contraction of the Argentine economy in 2016 would deter them from the round of 16 in this year’s World Cup, but the country and its new leadership was able to attain the primary target of 4.2% of GDP in 2017. The question, however, will be whether their grouping will be equally as lethargic and weak come 2022 in Qatar, as rates recently were raised to 40% to dampen inflation. As for Nigeria, the oil, gas, and agricultural resources are there.
Who will advance? Brazil and Switzerland
Who will be eliminated? Costa Rica and Serbia
Why? Group E is relatively top heavy with Brazil and Switzerland’s combined GDP reaching nearly $2.7tn, whereas Costa Rica and Serbia amount to $99.5bn when stacked up next to each other. Brazil, regarded as a favourite to win by many with twenty-six year old superstar Neymar in his prime, has recovered nicely from an economic standpoint across many sectors this year as low rates coupled with low inflation have helped consumer confidence and businesses alike. When the turf settles, all eyes will be drawn to Brazil’s upcoming election in October to see where the true potential of the recovery lies. Meanwhile in Switzerland, the home of the International Federation of Association Football (FIFA), the economics ministry reported that GDP less sports grew modestly at 0.4%. The “less-sports” tag is real, as the Swiss report GDP without income derived from sports, which during a World Cup year will be substantial. Good for them.
Who will advance? Germany and South Korea
Who will be eliminated? Mexico and Sweden
Why? Just like the team on the field, the German economy is steady and strong and remains one of the top unwavering nations economically. While government consumption fell in the first quarter, we continue to see increasing demand domestically with positive growth in private consumption and company investment. South Korea, still exhaling from the Trump and Kim meeting in Singapore this week, advanced 2.8% year-on-year in the first quarter with the manufacturing and agriculture sectors driving growth. Trump appears to be serious with his trade war pomposity in regards to his next door neighbours, and Mexico may be affected the most because of it.
Who will advance? United Kingdom (England) and Belgium
Who will be eliminated? Panama and Tunisia
Why? For one, the majority of people reading this article are British, but two, we’re talking about the fifth largest economy in the world. It’s important to point out though that the UK economy is coming off of its weakest period of GDP growth in five years. (We do, of course, acknowledge that it's England rather than the UK in the World Cup. Give us a break!) As for Belgium, they can be considered lucky for drawing Panama and Tunisia ($102bn combined GDP), but they deserve to move forward simply because they are smack in the middle of all 32 countries, playing with a GDP of $494bn. The year 2017 was another recovery year for Belgium which is great, but the situation could be much better, and there aren’t many signs of growth acceleration on the horizon.
Who will advance? Japan and Poland
Who will be eliminated? Colombia and Senegal
Why? Here we have another grouping that doesn’t seem fair. Japan and Poland combined equate to a GDP of $5.4tn, meanwhile the combination of the Columbian and Senegalese economy only yields $326bn. Japan has the highest GDP in the tournament, so look to them to walk through this World Cup (what am I saying?!).
This developed Asian market that produces more cars than anyone else does have one major problem… its old age. Japan recovered from a stock market crash that wiped out three times more wealth as a share of its economy that the United States' did in 1929, in the 1990s, and one may go as far as to say they’ve done an even better job making it all up. The one caveat to Japan’s situation, however, is that their shrinking working-age population has been decreasing, making it difficult to compare to other nations looking exclusively at GDP.
When looking at GDP per working-age adult the numbers are still quite impressive, so we can leave them be. Meanwhile, Poland’s economy is growing at a robust pace, supported by consumption, investment and net exports. Their relationship with the EU can be put on hold for the next month, as that may be the one main headwind at this time.
Enjoy the games!
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