TOKYO: Tokyo’s 2020 Summer Olympics could boost the economy by as much as one percent with construction and tourism helping to fuel growth, the Bank of Japan said on Monday.
Investment in Olympic-related construction, including a new stadium, will total 10 trillion yen ($83 billion) by 2020, with a building rush peaking in 2018, according to a report from the central bank.
The BoJ said the number of foreign visitors to the country was expected to reach 33 million in 2020, from 13.4 million in 2014.
It estimated that gross domestic product in the world’s number three economy in 2018 — the high point of Olympic-related impact — would get a boost of as much as six trillion yen, resulting in a one percent increase compared with overall GDP in 2014.
But that uptick would gradually fade by 2020, the central bank said, warning that Japan needs to create new demand so that the economic impact of the Olympics can continue after the event ends.
Prime Minister Shinzo Abe, a key salesman for Tokyo’s Olympic pitch, has been trying to beat deflation and revitalise the economy since he took office three years ago.
Tokyo staged Asia’s first Olympics in 1964, when the government pushed public and private investment projects. It also unveiled the iconic Shinkansen, or bullet train, that symbolised the country’s rise from defeat in World War II to its emergence as a major economic power.
In recent years, however, Japan has struggled to stimulate its increasingly fragile economy, which has suffered years of deflation.
A rapidly ageing society — more than one in four people are over 65 — is also weighing on the potential for future growth.
Japan’s economy saw a slight increase in the July-September quarter, growing 0.3 percent — and reversing an earlier forecast of a contraction that had risked putting the country into recession for the second time in as many years.