The International Cricket Council (ICC) World Cup 2023, which has commenced in India, is anticipated to give a short-term lift to the nation’s economy.
What Happened: A Reuters report revealed that cricket fans are investing heavily in tickets, travel, hotel reservations, and event festivities, infusing a wave of expenditure into the economy. Chief Economist at Bank of Baroda, Madan Sabnavis, surmises that the World Cup-associated spending might lead to an extra output of ₹18,000-20,000 crores in the final quarter of 2023.
The World Cup also aligns with India’s festive season, a period of high consumption, especially in the services sector. Sabnavis expects the hospitality and tourism industries to gain the most from this.
Online travel and hotel reservation portal MakeMyTrip has reported an increase in bookings to cities hosting key matches. Ahmedabad, the city hosting the India-Pakistan match, has recorded a 200% increase in room bookings since August, according to Rajesh Magow, Group Chief Executive at MakeMyTrip.
Sticky wicket: However, the cricket mania could have negative consequences as well. Jefferies warns that a larger number of Indian consumers might choose to stay home to watch the matches, thereby cutting down on spending on other recreational activities like cinema and shopping. On the other hand, this event could boost industries like food delivery, quick commerce, soft drinks, media, and online gaming.
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Bank of Baroda’s Sabnavis warns that the World Cup might stimulate the economy, but it could also drive up inflation by a potential 0.15-0.25% in the next two months.
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