Now, to that $800 million, Japanese estimates have added another 1.2 billion that potential foreign and domestic spectators will spend on hotels and meals, Commerce and travel within the country. More so, in a logic befitting the hope of these “redemption games”, Japan hoped to achieve what it called “legacy effects”: Theoretically, according to the first calculations of the organizing committee, the Asian country will earn 10 billion dollars in the next decade through tourists who will attend the games, fall in love with the region and return with children, grandchildren and great-grandchildren. from subsequent generations. Now, again and over the course of 10 years, that number has dropped dramatically.
In 2019 and before the pandemic, Japan received nearly 32 million tourists who spent about $44 billion in the country. In 2020, numbers fell naturally by 87% to just 4 million visitors, the lowest record in 22 years. The increasingly improbable scenario of a cancellation or postponement of the Olympics – only due to the approaching official start and the fact that some sports have already begun, although the Japanese government maintains that anything that can still be done – will come back – is taking a toll. It amounts to $16 billion, which is approximately 0.33% of the country’s GDP. However, the Nomura Research Institute report that came to that number warns that this slip will be “paltry” compared to the economic impact from the eventual massive Covid-19 outbreak caused by gaming. It may happen. It is one of the most feared dangers.
“If the Olympics cause contagion and infection, and a new national emergency is needed, the economic losses will be much greater,” Takahid Kiyoshi, an economist at Nomura Research Institute, explained to Reuters. The two previous emergencies, in 2020 and early 2021, caused a contraction of 4.8% and 3.9% in Japan’s GDP – all this in a country where vaccination is still done at a very slow pace and where less than 15% of 120 million citizens already have two doses. of the vaccine. However, the delicate situation of the Japanese economy did not start with the epidemic.
The head of the Tokyo Olympic Organizing Committee does not rule out last-minute cancellation due to the epidemic
Even before Covid-19 took over the world, Japan entered 2020 to recover from the economic impact of super typhoon Hagibis and an increase in consumption tax, from 8 to 10%, that brought the country to the brink of a technical recession. To address the additional economic effects of the pandemic, the Japanese government has approved massive stimulus packages worth $3 billion – which has raised the country’s domestic debt to $12.3 billion, 257% of GDP and the largest industrialized country. According to local media, the Japanese government plans to introduce a new round of stimulus before October, when it has to go to legislative elections. In these calculations, of course, is the hope that the Olympics will run smoothly and that the fifth wave of the epidemic will be avoided.