The Goldman Sachs Guide To The Socceroos' World Cup Chances

Photo: Getty Images

Goldman Sachs has prepared a 67-page report on the economics of the World Cup.

It has analysis for each country playing in the tournament, and looks at their respective chances of winning.

Using a model developed by Jan Hatzius, the Goldman Sachs chief economist, the bank is predicting Brazil will take it out — and that Australia has virtually no (0.1) chance of becoming champion.

GS has prepared a similar report for every World Cup since 1998, and this one is full of insightful — and sometimes hilarious — analysis.

There are parallels between Australia’s domestic economy, and the Socceroos, GS says.


They’re both at the end of a “golden age”. Australia has seen several of its high-profile international players retire.

“Of the 14 players fielded in Australia’s last World Cup game, realistically only team talisman Tim Cahill and Marco Bresciano are likely ‘starters’ in Brazil,” the report says.

In comparison, the Australian economy is coming to grips with the end of a heady resources boom that saw in 22 years of uninterrupted expansion.

“Most importantly, the dual booms in commodity prices and mining construction that delivered Australia through the global financial crisis relatively unscathed are now swinging sharply into reverse,” Goldman’s Andrew Boak writes.

Ultimately, for Australia to successfully navigate the current period of elevated economic risk would truly be some achievement – unprecedented in the country’s long history of commodity booms followed by painful busts. The burden on local policy makers is therefore a heavy one, and the government is taking a significant risk by seeking to underpin Australia’s AAA credit rating via a combination of the largest cuts to public expenditure in almost two decades and the introduction of unpopular tax increases. As kick-off in Brazil approaches, the current Prime Minister may reflect with unease that Australia’s last appearance in the World Cup on June 23, 2010 coincided with the then Prime Minister being unexpectedly usurped by his Deputy – in large part in response to the government’s mishandling of taxation issues.

Australia is facing a horror group, that will see us up against the world’s best teams right from the beginning. Everyone is being optimistic. If we’re being honest, Australia’s chances don’t look good.

But, GS has managed to find some positives, including the city the team will be based in: “the United Nations has rated the Brazilian city of Vitoria (the Socceroos home base) as the ‘fourth best state capital in Brazil to live in’ – so, results aside, it should be quite a pleasant stay.”

Meanwhile, even if Australia doesn’t take podium spot in the contest, there is one measure in which we are world class: ticket sales. GS says Australia has bought the second-largest number of foreign take-up tickets (41,000, behind the US on 154,000). It also related this fact to economics.

Cynics may view such demand as merely a function of the purchasing power of an elevated AUD and the drawcard of an exotic beach holiday on panema. However, for the true believers, there is always the hope that Brazil will mark the dawn of another ‘Golden Generation’.”

Here’s a bonus item from the report. This chart shows the probability of each team making it through every round, according to Goldman Sachs.

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