Striking a balance: The economic impact of hosting the Paris 2024 Olympics

Pratham Basu

As the 19-day Paris Olympics 2024 comes to an end, the final cost estimated is around $8.87 billion—surpassing the GDP of the Maldives ($7.1 billion, according to IMF data for 2024). Despite this significant expenditure, Paris will not hold the record for the most expensive ‘Summer Olympics’. That title belongs to Rio 2016 with $24 billion, followed by the 2012 London Games, which cost approximately $17 billion and Tokyo 2020 at around $13 billion.

Source : Luka Dugaro

Was it worth it?

About 96% of the Paris Olympics ’24 was privately funded through the International Olympic Committee (IOC) while the remaining 4% came from public funding. Aligned with the IOC’s 2020 Agenda, the Paris Games aimed to boost local development and job creation. 

Source : Olympics.com

According to a report published by Centre de droit et d'économie du sport (CDES) of the University of Limoges, the games are expected to generate around 181,000 jobs. Public funding was mainly used for long-term projects such as sports facilities, transportation, and technology betterment, providing enduring benefits like improved infrastructure and higher tourism appeal.  During the games, visitor spending was estimated at $2.8 billion.

Source : Olympics.com

The economic impact is projected to last from 2018 to 2034, with 84% of benefits realized by the end of the Games and the remaining 16% supporting long-term gains, including increased tourism and enhanced infrastructure. Approximately 500 Micro, Small, and Medium Enterprises (MSMEs) were involved, creating a strong local business engagement. In line with sustainability goals, the Games aimed for a 50% reduction in carbon emissions.

Source : Olympics.com

Every rose has its thorns. 

According to the Council on Foreign Relations, hosting the Olympics has several drawbacks. Employment generated often benefits those already employed, with minimal impact on reducing unemployment. Profits from contracts frequently go to international companies rather than local economies. Additionally, the cost of Olympic infrastructure creates a fiscal burden long after the games. For instance, Beijing's Bird’s Nest still costs $10 million annually to maintain, and Montreal only finished paying off its 1976 Olympics debt in 2006.

Cost overrun of hosting Olympics Source: The Oxford Olympics Study 2024

According to a 2016 study by the University of Wisconsin, the Athens 2004 Games laid the foundation of Greece’s financial crisis, with costs snowballing to $15 billion, far exceeding the initial budget. The Rio 2016 Olympics lost billions, partly due to the Zika virus scare. Oxford University research indicates that the Olympics have never come in under budget, with the 2016 Rio Games overrunning by 352% to $23.6 billion, and Sochi 2014 exceeding its budget by 289% at $28.9 billion.

Finding the middle ground

To balance the benefits and drawbacks of the Olympics and enhance economic viability, IOC President, Thomas Bach established the Olympics Agenda 2020. Under this framework, the Paris 2024 Games are among the most cost-effective in recent decades. The use of existing stadiums and other facilities, along with events hosted in cities like Lyon, Nice, and Marseille, has reduced costs and avoided long-term infrastructure debt.

Existing venues were repurposed to host the Paris Olympics

However, critics argue that only wealthy countries should host the Games, as developing nations might face inflated risks and costs. Some suggest that fixed locations could be used to reuse expensive facilities, thereby reducing the need for new venues and cutting overall costs.

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