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Japan seeking signs of optimism amid dire news for the economy and Olympics preparation
- The new year presents Japan with an unique opportunity to recast its economy and move into new and emerging areas instead of depending on traditional sectors
- While this year promises to be challenging for its economy, whether Japan can turn the tide will depend on whether it has learned the right lessons from 2020
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The year 2020 was not a good one for the Japanese economy. It was battered by the Covid-19 pandemic, as were many other economies in the region. While Japan’s economy did show some signs of recovery in the third quarter, it seems to be too early for comfort.
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The “Go To Travel” Campaign, which was one of the highlights of the government’s strategy to tackle the economic slump following the coronavirus outbreak, has been suspended until January 11 on account of the recent spike in Covid-19 cases. The capital city of Tokyo reported more than 1,337 cases on December 31, setting a record high.
So where does Japan stand in 2021? First, the biggest challenge will be to successfully host the Summer Olympics, scheduled for later this year. There are still many concerns, but Prime Minister Yoshihide Suga pledged in his new year address to continue with the preparations for the Tokyo Olympics and Paralympics.
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Second, the tourism sector needs a big boost as it has been badly hit by the pandemic. The local economies of many of the smaller towns in Japan have also suffered. In addition, Japanese companies operating outside Japan have seen their revenues plummet during the pandemic and this has hit their balance sheets.
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