Economic Losses from Tokyo Olympics Postponement Estimated at Approximately 8 Trillion Won

[Image source=EPA Yonhap News]

[Image source=AP Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] As the possibility of postponing the Tokyo Olympics increases due to the spread of the novel coronavirus infection (COVID-19), economic losses caused by this are projected to reach 600 billion to 700 billion yen (approximately 7 trillion to 8 trillion KRW).

On the 23rd, Nihon Keizai Shimbun reported that if the Tokyo Olympics are canceled, economic losses would amount to 7.8 trillion yen (approximately 90 trillion KRW), and if postponed, 600 billion yen. It is forecasted that Japan's gross domestic product (GDP) will decrease by 1.4% as a result.

Although the Japanese economy experienced a downturn due to the consumption tax rate increase in 2019, there were expectations for recovery with the hosting of the 2020 Olympics. However, Nihon Keizai Shimbun analyzed that the prolonged COVID-19 pandemic has cast a shadow over economic recovery prospects.

According to Toshihiro Nagahama, Chief Economist at Dai-ichi Life Research Institute, if the Olympics are postponed or canceled, Japan's GDP this year is expected to decrease by 1.7 trillion yen (approximately 19 trillion KRW). Including various ripple effects, about 3.2 trillion yen (approximately 37 trillion KRW) is expected to evaporate. This estimate is based on the economic growth rates of recent Summer Olympic host countries adjusted to Japan's economic situation. While economic effects from infrastructure improvements are effective until the year before the event, tourism demand and other factors are expected to shrink significantly.

Katsuhiro Miyamoto, Professor Emeritus at Kansai University, estimated that economic losses due to the Olympic postponement would reach 640.8 billion yen (approximately 7.4 trillion KRW), and 4.5151 trillion yen (approximately 52 trillion KRW) if canceled.

According to Junichi Makino, Chief Economist at SMBC Nikko Securities, if the spread of COVID-19 continues until the scheduled July Tokyo Olympics, Japan's GDP is expected to decrease by 7.8 trillion yen (approximately 90 trillion KRW). Economic damage from canceling the Olympics is projected to reach 670 billion yen. This includes a decrease in inbound tourists and domestic consumption stagnation. Net profits of listed companies are expected to decline by up to 24.4%.

This content was produced with the assistance of AI translation services.