Final Score | 14th July 2014

Sometimes the economics profession needs to take stock and admit it got it wrong. I went with a mere 2-1 victory to Germany against Brazil. This was, justifiably perhaps, the result of looking at the exports of Germany to Brazil and vice versa. I chose the wrong lead-indicator and have to hold my hands up and say I should have looked at the world rankings. As everyone will know, Germany is the world’s third largest exporter after China and the US. Brazil, in contrast, is 19th: so if I had gone with this ratio, I’d have gone 6-1. But who would have believed me?

As Argentina’s Aguero said this week, “All the pressure is on Germany”. Argentina doesn’t rank in the top 30 of global exporters and needs to find more than US $1bn by the end of July to avoid another sovereign default. Football is a distraction. It needs a miracle – a hand of God, maybe – or, as I argued last week in free trade terms, an “invisible hand” of God. Unfortunately for Argentina, the best hope it has for trade recovery is through its exports of car parts to Brazil, and since Brazil is likely to underperform in that sector this year (exports forecast to grow by just over 1.5%), this is a dangerous situation.

Translated into footballing terms, Argentina is overly reliant on Messi playing brilliantly, which he hasn’t done so far despite pulling Argentina through to this stage practically by himself. I for one would put money on Lahm, Mertesacker and Schweinsteiger between them being able to contain him. And with the entire Brazilian nation now cheering on Germany as the least awful alternative, the effect could be a decidedly mediocre performance.

So I, like practically everyone else, have to go for a Germany win. However, Germany’s exports to Argentina are forecast to grow at 6.5% this year while Argentina’s imports into Germany will grow by 6%. This suggests that it won’t be an easily-won victory: 0-0 after extra time and Germany to win on penalties?

Post script  | Paul the Octopus died just four months after the end of the 2010 World Cup. While I hope this will not happen to me of course, I am bound to point out that Germany’s imports of Live Molluscs (including Octopus) are set to increase in 2014 by nearly 4%. Might the German-British Forum be looking for a replacement pundit, I wonder?