Increasing the GDP might help winning Eurovision

Macro commentary by eToro analyst for Romania, Bogdan Maioreanu

 Eurovision 2022 elected its winner in Turin, Italy and this year was Ukraine. This came as no surprise, Kalush Orchestra melody “Stefania” being a favorite. An actual surprise was in fact the Romanian song “LLamame” by WRS. It was estimated to finish outside the final on the 31st place and not only managed to qualify but ended on the 18-th place overall. Same story for Moldova where Zdob si Zdub with the Advahov Brothers song was seen at around 30-th place but finished 7-th. The Moldovans received the second largest popular vote after Ukraine. Despite the controversies related to voting, the Eurovision song contest is a popular show, having around 200 million viewers worldwide.

Since the voting system is dual, professional juries and popular vote, the question is how do you win Eurovision? A good song, popular emotion? Certainly. But are there other factors that help?  A study is trying to see if the win is related to the size of the population of the winning countries. Luxembourg with a population of less than 50.000 people won 5 times. We have winners from countries with less than 2 million population like Estonia and Latvia. In the last 5 years we have had winners from Portugal, a 10 million people country, Israel – 9 million, Netherlands – 17 million, Italy – 60 million and this year Ukraine – 44 million. The largest country by population, Russia, with over 144 million people, won only once in 2008. But Ireland with 5 million inhabitants won 7 times. Therefore the conclusion is that population size does not matter.

What about economics? Countries that have won two or more Eurovision titles have an average GDP per capita significantly higher than those nations with one Eurovision victory. Ireland with 7 wins has a GDP per capita of over 83 thousands dollars. Sweden that won 6 times has over 51 thousand dollars. Luxembourg that won 5 times has over 115 thousand. Ukraine is the exception, winning three times and having the lowest GDP per capita of around 3700 dollars. In the last five editions all other winners have had over 19 thousand dollars GDP per capita. So, statistically, if Romania wants to win Eurovision, it will have to significantly increase its GDP per capita which is now around 13 thousand dollars. But sometimes even this will not help you if your song is not liked by the public. This year Germany’s song finished last though the country’s GDP per capita is over 41 thousand dollars.

Does winning Eurovision matters? A study by the University of Tennessee has found significant statistical correlations. The 3-year effect from winning Eurovision is associated with increases in exports by 16.6 billion dollars. This is consistent with another study that showed a similar effect from winning the World Cup in Football. For imports, the 3-year effect from winning Eurovision is linked with a 4.138% decrease in imports as a percentage of GDP. Some other finds are showing that it might decrease the outflows of foreign direct investments and increase tourism. Statistically, winning Eurovision might prove to be a possible but unlikely way to correct the trade balance deficit that in Romania sits at around 2.5 billion Euro.

However, organizing the Eurovision song contest is not a cheap enterprise. The costs for the latest one in Turin were north of 16 million euro and for the one in Rotterdam in 2021 were 19 million euro. The largest cost in the past ten years was in Azerbaijan in 2012 with 60 million euro followed by Denmark with 44.8 million  and Ukraine in 2017 with 37 million euro. But the budgets are getting smaller with a minimum of 14 million spent by Sweden in 2014 making winning the Eurovision more affordable, if one was concerned about how much it will cost to host the contest.

In the history of Eurovision, Romania placed two times on the third place in 2005 with Luminita Anghel and Sistem song “Let me try” and in 2010 with Paula Seling and Ovi singing “Playing with Fire” and once on the fourth place in 2006 with Mihai Trastariu song “Tornero”. So, let’s work on the songs but also on the GDP increase to prepare for the 2023 edition.


Bogdan Maioreanu, eToro analyst and markets commentator, has over 20 years of experience in financial services and investments and a strong background in journalism. He held different Corporate Banking management positions in both Raiffeisen Bank and OTP Bank, before moving to business consultancy roles working for IBM Romania among others. Bogdan is an Executive MBA from Asebuss and Washington University.

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