The UK economy has seen large boosts in growth reflected by the GDP and GDP per capita. GDP is considered one of the primary indicators of a country’s economic performance and can be calculated through totalling the value of all goods and services provided by a nation within a year.
GDP per capita is considered another good indicator of standard of living as we take the measure of the total output of a country (GDP) and divide it by the number of people in the country. Higher GDP per capita generally correlates to higher standards of living; although there are flaws such as happiness and poverty which are largely unconsidered in this measurement. Flaws of using GDP per capita will be discussed and explored at later stages.
GDP per capita is especially useful in comparing countries against each other as it pits their relative performance against each other - with rises in capita suggesting specific growth in a country due to it reflecting a natural increase in productivity. Using such indicators will give an idea to how well countries have fared during and after hosting the Olympics and the differences shown will help identify reasons why certain Olympics were unsuccessful or how achievement can be emulated for future.
After being adjusted for inflation, the GDP per capita of the UK has grown tremendously after the Financial Crisis of 2008, [dubbed as the worst financial crisis since the 1930 Great Depression]. From 2012, slow recovery is seen from 2010 to 2012, however from the London 2012 Olympics, a massive boom is observed. Between 2012 and 2013, the UK experienced a 1.48% increase in GDP per capita; which is the largest jump during the 6 year time period. This further reinforces the idea of exponential growth from the local economy and due to boosts from external sources such as the Olympics.
However, it must be questioned - to what extent did the Olympics really have on the growth of UK’s GDP per capita within 2012 to 2013? Additionally, answers will also highlight multiplier effects in other industries long after the injection of short-term tourism and capital.
Complimenting my statistical research of GDP across years, I used BBC Business to understand the scale in which Olympics have contributed to the UK economy and through the 16 days in which the event is operated in, the UK economy was purely boosted by £9.9billion GBP. Although hosting games are estimated around £8.9billion, the substantial surplus being a sufficient amount required to trigger such an offset of national consumption and investment which ultimately boosts Aggregate Demand and consequently national growth. Aggregate Demand is composed of 4 factors; consumption, investment, government spending and net trade.
Using the UK Trade and Investment department (UKTI), for statistic on the Olympics, it was stated that the Olympics resulted in additional £2.5 billion inward investment in which 58% of the contribution was attributed from outside of London. Similar outcomes can be seen as £5.9 billion sales occurred following Olympic promotions by the Foreign Office and UKTI.
Image credits: telegraph.co.uk
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