A strong performance by Australia at the World Cup could restore some local consumer confidence, but don’t hold your breath.
While sporting victories such as the America’s Cup in 1983 helped turn around the national mood, economists say it would take a world-class performance in Brazil to have a similar effect in the weeks ahead.
Consumer confidence remains in the doldrums as people continue to worry about having less disposable income due to tough measures announced in the federal budget.
AMP Capital Investors economist Shane Oliver says it would probably take the government to compromise on its budget measures to brighten up consumers.
“If the Australian football team does reasonably well that might contribute to a feeling of national wellbeing and that in turn can affect spending at restaurants or pubs,” he said.
“A sporting achievement could certainly help but we would have to do pretty well to see that happen.”
The Socceroos have a tough road ahead as they prepare for an opening round match against Chile in the north coast city of Vitoria on Saturday.
And it doesn’t get any easier, with matches against European powerhouses The Netherlands and Spain to follow.
Dr Oliver predicts there will be little economic impact if Australia struggles through its matches.
“The chances of Australia doing particularly well in Brazil are quite low, with a lot of other countries ranking better,” he said.
He noted the national economy had emerged from recession in 1983 following a combination of the America’s’s Cup win, a change of government and the end of a drought.
Dr Oliver said local confidence levels weren’t at disastrous levels but there had been no improvement following the budget.
The Westpac Melbourne Institute Index of Consumer Sentiment released on Wednesday rose by just 0.2 per cent in June to 93.2 points, after hitting a two-year low in May.