Ratings agency Moody's has said the Winter Olympics in Sochi will most likely fail to have a long-term economic effect on the Russian economy. It argues authorities will find it hard to raise enough maintenance money.
Considering immense initial investment expenditure, the Sochi Games would stand little chance of fueling Russian growth in the long run, Moody's said in an assessment published Wednesday.
Even before the start of the Olympics, it had become obvious that the Russian ruble would not become any firmer because of the hoped-for Sochi investment effect. The national currency had declined 5 percent against the greenback since the start of the year and economic growth was expected to reach only 2 percent in 2014.
Moody's said that while the Games would have a neutral impact on Russia's debt rating, many private investors looked unlikely to cash in on the event.
"The long-term gain depends on the hotel sector, because the majority of the private investors left their money in the hotel segment," Moody's analyst Sergei Grushinin told Reuters news agency.
The ratings agency raised doubts whether the government's efforts to attract new tourists to Sochi would be enough to lure at least 2.5 percent more visitors after the Olympics to ensure most hotels were full and profitable.
Moody's warned the only real winners in economic terms might be global Olympic sponsors such as Proctor & Gamble and General Electric as they stood to profit from exclusive worldwide marketing rights for their products.
hg/ipj (Reuters, AP)