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The deadly coronavirus outbreak will affect Japan’s economy by hurting tourism to the nation, said Fumio Kishida, the ruling Liberal Democratic Party’s policy chief.

“There will definitely be an impact on the economy,” Kishida told NHK on Sunday. The outbreak “has already been prompting cancellations one after another, affecting the tourism industry.”

The virus is posing a challenge to Prime Minister Shinzo Abe’s target of increasing the number of foreign visitors to 40 million this year, when Tokyo hosts the Olympic games. Chinese tourists accounted for 40 percent of spending by foreign tourists in Japan last year, according to Yuki Masujima of Bloomberg Economics.

Abe said Friday that Japan will bar entry to people with symptoms of coronavirus effective Feb. 1. China banned all outgoing overseas group tours starting Jan. 27.

In addition to the virus outbreak, there are downside risks to Japan’s economy, including the U.K.’s departure from the European Union and tensions in the Middle East, Kishida said. That makes it important to implement the stimulus package compiled late last year, he added.

In December, Abe announced a stimulus package totaling around ¥26 trillion to support growth in an economy contending with an export slump, natural disasters and the fallout from a recent sales tax increase.

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