4th emergency declaration to cut GDP by ¥470 bil.

The Yomiuri Shimbun

10:05 JST, July 10, 2021

Declaring a fourth state of emergency is likely to reduce the nation’s real gross domestic product (GDP) by ¥470 billion, as people are expected to refrain from summer travel, including traditional hometown trips, a senior economist has said.

The government on Thursday decided to again declare a state of emergency for Tokyo. The state of emergency currently in place for Okinawa Prefecture and priority measures taken for Osaka Prefecture and three other prefectures will be extended.

The expected decline is attributed to people not taking trips or returning to their hometowns during the summer holidays. The service industry — especially restaurants and accommodations — will miss out on its most profitable time of the year, according to Keiji Kanda, senior economist at Daiwa Institute of Research Ltd.

There are also concerns about compounding the worsening employment situation, he said.

In response to the government’s decision, Watami Co. Chairman Miki Watanabe announced Thursday that the company plans to almost double the number of restaurants closed in Tokyo from the current 36 to 70.

“Only alcohol is being blamed [for the spread of the disease], and we alone are sacrificed. If we are now in an emergency situation, I would like the government to do something similar to a thorough lockdown,” he said.

Takahide Kiuchi, executive economist at Nomura Research Institute Ltd., estimated that holding the Tokyo Olympics and Paralympics without spectators will erase ¥57.4 billion in economic benefits, compared with capping the number of spectators at 10,000 for each venue. This is because there would be massive revenue losses for tourist accommodations and lost sales of tickets, food and drinks.

JTB Corp., the sponsor of the Olympic spectator tours, which had suspended the sale of travel plans due to the postponement of the Games last year, resumed sales in May and ended them in June.

JTB has previously decided to refund the full amount on travel plans to customers in the event that venues for the Games are not open to the public.

“We’re expecting a fairly large loss,” JTB Chairman Hiroyuki Takahashi said.