The postponement of the Tokyo Olympics and Paralympics will deal yet another blow to the Japanese economy, which has already been affected by the spread of the new coronavirus.
A number of assessments have been made regarding the economic impact of the delay, including a prediction that the growth rate for the gross domestic product will drop by 0.1%. As a result, calls are increasing for the government to enlarge the scale of an economic stimulus package slated to be compiled in April.
Private research institutions have released impact analyses associated with the delay. Mitsubishi UFJ Research and Consulting, for example, has predicted the 2020 GDP growth rate will fall by 0.1%, due to the delay of demand worth about 600 billion yen that had been expected mainly from foreign visitors.
The NLI Research Institute estimates that the Tokyo Olympics will have an economic effect of about 10 trillion yen over the seven years from fiscal 2014 to fiscal 2020, and that the equivalent of the 2 trillion yen expected for fiscal 2020 will be delayed.
The Dai-ichi Life Research Institute has assessed that hosting the Games will boost the 2020 GDP by about 1.7 trillion yen, but the decision to delay will defer this benefit. The institute estimates, however, that about 13.8 trillion yen in economic effect has already been generated by building Olympic-related facilities and upgrading transportation networks.
This means the postponement will not erase the overall economic boost of hosting the Games.
Some in business circles have accepted the situation, expressing relief at having avoided the worst-case scenario of the Games being canceled.
"The economic impact of the delay will be relatively minor because we can expect to recover the demand," said a researcher at the The Mitsubishi UFJ Research and Consulting.
Japan Business Federation (Keidanren) Chairman Hiroaki Nakanishi acknowledged at a press conference on Wednesday that the decision was unavoidable considering the situation in many countries. "We have to do whatever we can as members of the business world," Nakanishi stressed.
As a wide range of businesses -- including hotels, restaurants, transportation, flat-panel televisions and sport-related goods -- had increasingly expected special demand from the Games, the postponement is forcing many to review business plans in such areas as financing and securing workers.
Akio Mimura, chairman of the Japan Chamber of Commerce and Industry, called on the government to fully support businesses through the stimulus package in a statement issued Wednesday.
"It is urgent to work toward economic recovery and I expect strong economic and fiscal measures to be swiftly implemented," Mimura said.
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