Thursday 18th August 2011
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The Reserve Bank of New Zealand (RBNZ) said it will be a challenge to disentangle the temporary fluctuations in economic data caused by the Rugby World Cup to work out how the economy is evolving.
In a report on the economic impact of the rugby tournament starting in September, the central bank said the event would attract 95,000 overseas visitors but domestic spending was likely to be significant.
International visitors are forecast to spend $700 million but spending by locals may be at the expense of spending on other things. The expected gross spending by visitors was equivalent in magnitude to around 1.4 percent of quarterly gross domestic product.
The bank wanted to distinguish between one-off effects and persistent pressure on resources.
The event was occurring at a time when tourism sector activity was relatively subdued and the high New Zealand dollar may reduce the number of visitors from Asia, North America and Europe.
The 1987 Rugby World Cup, co-hosted by Australia and New Zealand, had no obvious impact on visitor arrivals.
This was not too surprising, given the games were shared across countries and the total attendance at these matches was 600,000 in comparison to 2.24 million at the 2007 Rugby World Cup.
"New Zealanders' attendance at the Rugby World Cup will play an important role in determining the success of the tournament," the central bank said.
The net impact of the tournament on short-term and longer-term activity, remained to be seen. The exposure of New Zealand through the tournament may act to increase tourism longer term.
"From the Reserve Bank's perspective, the real issues are not necessarily about assessing the net benefits and costs. Instead, they are about understanding the way in which the tournament is affecting macro-economic data and disentangling the temporary fluctuations from the trend way in which the economy is evolving," the paper said.
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