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Which countries spent the biggest share of GDP on the Olympics?

Which countries spent the biggest share of GDP on the Olympics?

  • Published: 30th July 2021

Put in context, Japan’s massive overspending doesn’t look so bad 

Despite promises of regenerated city zones, a boost to tourism and the creation of jobs, economists have repeatedly pointed out that hosting an Olympic Games is usually a net financial drain. 

Yet few countries have ever had as raw a deal as Japan, which has seen the Tokyo 2020 Games kick off a year late and with no spectators. 

The lack of fans could cost Japan’s economy $1.3 billion, reckons Takahide Kiuchi, economist at the Nomura Research Institute. Many businesses which expected a tourist influx will be hard hit. 

And while a recent study found Olympic budgets typically run over by 175%, Japan’s costs look set to run to $28 billion from an initial budget of $7.3 billion (that’s 284% over budget).

Reframing the Narrative 

Of course, $28 billion can be put in context to mean very different things. It’s more than the size of some countries’ entire economies. It’s about a third of the amount Amazon CEO Jeff Bezos increased his personal wealth by during the first year of the coronavirus pandemic. 

For an economic powerhouse like Japan, it’s actually not too shocking a figure when compared with national spending on other Games over the last 30 years. 

MoneyTransfers.com looked at Statista figures for the cost of hosting the Olympics from 1992 to 2021. We then calculated what percentage this figure was of the host countries’ national GDP at the time, using World Bank data. 

Out of the eight Games over the last 30 years, Japan was only on course to spend the sixth highest amount by this measure: 0.55% of its GDP. 

Hey, Big Spenders 

On our spenders’ podium, Spain took the Gold medal for Barcelona 1992. The Games cost the country an estimated $11.1 billion – 1.76% of its $630 billion GDP at the time (note that all figures have been converted into current USD). 

Arguably, that’s no bad thing. Barcelona is frequently cited as an example of a city that massively benefited from being a host city. The Games created an estimated 20,000 jobs, and in the long-term are said to have changed global perceptions of the city, and boosted government investment in sports nationwide. 

In second place was the birthplace of the Olympics, Athens, with its 2004 Games. Greece spent $3.3 billion to host, accounting for 1.58% of its $209 billion GDP. 

Unfortunately, the opposite is often said about its economic impact. A decade after the Games, many of the venues constructed for 2004 lay derelict. Some commentators have argued “the Olympics rotted Greece”. Ouch. 

Taking the bronze medal on our spenders’ podium was Australia. The Aussies spent $5.7 billion on Sydney 2000, out of a $415 billion GDP (a 1.58% chunk). 

The verdict here has been a little more mixed. One analysis argues that the Games provided no notable tourism legacy, and that since they took place during a period of low employment in Australia, newly-created jobs had little impact. But the International Olympic Committee has (unsurprisingly) pointed to figures estimating the Games brought about a GDP uplift of between $4.8 and 5.3 billion for the country.  

Runners Up

Turning to the bottom of our spenders’ list, it was perhaps unsurprising that hosting the Games was a drop in the ocean of the GDPs of the world’s two biggest economies. 

Atlanta 1996 cost the United States a modest $4.8 billion, which was just 0.06% of its $8 trillion GDP that year. China pushed the boat out a little more, spending $7.7 billion on Beijing 2008, but this was still only 0.17% of GDP amid its run of staggering annual economic growth since the year 2000. 

In the middle of our list were Brazil and the UK, two countries that spent similar amounts on their Games and both rank among the world’s top 10 biggest economies. For Brazil, $15.6 billion expenditure on the Rio 2016 Games equalled 0.87% of GDP, while for the UK the cost of London 2012 was a hefty $17.1 billion, which was 0.63% of GDP.

Below, you can explore the full data and re-order the ranking by cost of Games, GDP or Games as a share of GDP.

Beyond GDP

So is it fair to say the ballooning budget for Tokyo’s games isn’t so dramatic given the economic cushion it has to fall back on? 

Associate Professor of Public Policy and Economics at the University of Michigan’s Gerald R. Ford School of Public Policy, Joshua Hausman, commented: 

“While spending as a share of GDP will certainly be smaller when the Olympic games are held in a large economy versus in a smaller economy, it is hard to judge how large the overall economic impact of the Olympic games might be. 

“There are many possible effects beyond direct spending. There is not only possible tourism for the games itself, but also future tourism that might be inspired by the television coverage of the games. There are also possible effects on consumer and business sentiment.” 

Judith Grant Long, Associate Professor of Sport Management and Urban Planning at the University of Michigan, told MoneyTransfers.com:

“Cost relative to GDP addresses affordability but does not assuage concerns with opportunity cost. 

“$16 billion might not be a lot of money relative to the Japanese economy, but it is still a lot of money that might be spent on other things. 

“Even if the operating revenues and potentially insurance offset some of this total cost, opponents are right to point out that absent the Olympics, other public spending goals could have been addressed or taxes lowered – which depending on one’s economic stripe, could be argued to have led to a greater impact on GDP.”

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Money transfers, foreign exchange, remittance and currency research and insights from our newsdesk team.