Hosting the 2020 Summer Olympics in Tokyo is likely push up Japan’s gross domestic product by 0.5 percent in that year with positive economic effects worth ¥4.2 trillion, due partly to expected growing demand for new construction and a boost to tourism, according to a research institute’s projection.
The hosting of the Olympics in the Japanese capital is expected to produce ¥2.3 trillion in new demand including construction investment, replacement of home electronics appliances and sales of Olympics-licensed goods, SMBC Nikko Securities Inc. said in a recent report.
Construction investment is estimated to reach ¥383.1 billion, fairly small compared with such investment in the past including for the 2008 Olympics in Beijing and 2012 Olympics in London, as Tokyo plans to make use of many existing facilities, the research institute said.
The 8.5 million tourists that the Tokyo metropolitan government estimates will visit Japan for the 2020 Olympics, meanwhile, is greater than the total number of foreign visitors to Japan in 2012, the institute said.
Restaurants and hotels will be among businesses benefiting the most, followed by the transport sector, publishers, the broadcasting industry and others, it said.
The Tokyo metropolitan government also estimates that the hosting of the Olympics will have spillover effects worth ¥2.96 trillion for the Japanese economy in the eight years from 2013.
Some economists say the hosting of the 2020 Olympics will also boost interest in sports activities, raising related demand.
The government of Prime Minister Shinzo Abe has employed a set of policies dubbed Abenomics to restore economic growth. If consumption picks up further on growing momentum toward the 2020 Olympics, it could lead to wage hikes and help the Japanese economy move closer to its goal of defeating deflation.
Asked to comment on Tokyo’s hosting the 2020 Summer Olympics, Finance Minister Taro Aso told reporters, “Consumer spending will move positively. The impact on gross domestic product and nominal economic growth will be big.”
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