Switzerland Is the Guaranteed Winner of the World Cup, and the Olympics

(Bloomberg) -- Switzerland is likely to be the winner from this year’s soccer World Cup in Russia – regardless of who actually takes home the trophy.

As home nation to sporting bodies like FIFA, UEFA and the International Olympic Committee, its economy gets a boost every two years when major events are held, no matter how the Swiss team performs or where the competition takes place. That's thanks to a quirk in the international methodology for calculating gross domestic product that requires revenues and license fees from tournaments to be booked in the country where the host organizations are located.

In years with tournaments such as the World Cup or the Olympic Games, Switzerland’s rate of annual GDP growth is bolstered by between 0.1 and 0.2 percentage points, the State Secretariat for Economic Affairs calculates. And there’s a negative effect in years when big events don’t take place.

Soccer’s international governing body is based in Zurich, while UEFA, its European counterpart, is located in Nyon, by Lake Geneva. The IOC is in Lausanne.

So even if the World Cup ends up going to Germany or Brazil this summer, fans in Switzerland can take comfort. At least the money collected via licensing fees “by definition belongs to Swiss economic activity,” according to Ronald Indergand, head of short-term economic analyses at the SECO.

To contact the author of this story: Catherine Bosley in Zurich at cbosley1@bloomberg.net.

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