Economic Effects of Olympics to Push 2018 GDP Up by 5-6 Trillion Over 2014: Bank of Japan
The Bank of Japan calculates likely economic effects of the Tokyo Olympics of 2020 to be some 1% over 2014 or to the tune of 5-6 trillion yen due to construction investments up to the year 2018.
The Bank of Japan figures besides construction investments leading to the Olympics a substantial influx of foreign tourists visiting Japan. In the investment sector, the new national stadium and other auxiliary structures including private hotels should amount to 10 trillion yen. In tourism, the Bank of Japan estimates 33 million visiting Japan in 2020.
Based on the calculation, Japan's GDP will rise over 2015-2018 at an annual rate of 0.2-0.3% and by 2018 enough to amass 5-6 trillion or equivalent to two years' business profits of Japan's top-earning industry - Toyota.
The overall economic effects over the period 2014 through 2018 should aggregate 25-30 trillion yen, according to the Bank of Japan. From 2019 onward, construction investment would wane and its upward momentum should slacken.
The Bank of Japan further points out two elements in connection with economic effects of the Olympics, namely:
One, how to tackle labor shortage. At the peak of construction rush in 2018, additional 730 thousand more laborers will be required than in the event of no Olympics ever took place. Construction sites can be short of hands; service industries understaffed to offer sufficient services. Women and aged workers may have to be mobilized and foreigners recruited to tide over. Further, efforts for investing in mechanization and higher productivity may be called for.
Two, how to minimize backlash effects on economy after the games. Back in 1994 in Lillehammer, Norway, the city's tourist industry suffered as 40% of the hotels in Lillehammer went bankrupt.
It is essential then that tourism should be promoted toward and beyond the Olympics in 2020 and that an entirely fresh line of demands be created to take over the current Olympics-oriented construction investments.
