Japan's GDP will be boosted by 0.7% if tourism returns to pre-pandemic levels.

Japan’s GDP will be boosted by 0.7% if tourism returns to pre-pandemic levels.

It is likely that the Japanese economy, which is at risk of slowing down, will benefit from the new crown epidemic’s relaxation of port management requirements. Globally, the number of tourists from other countries has returned to half of what it was before the pandemic, and some estimates suggest that Japan’s gross domestic product (GDP) would increase by 0.7% if the same thing were to happen there. Still blowing from the east is the wind of the yen’s continued depreciation, which means that the restrictions need to be further relaxed.

As of the 11th of October, Japan will relax its port management and lift the ban on individual free travel and visa-free visit days. Additionally, the port management will be simplified. Prior to the outbreak, tourism and independent travel accounted for 9 of every 10 non-Japanese visitors to the country, while the remaining 8 were business visitors.

The Japan National Tourism Organization (JNTO) reported on September 21 that the number of tourists who traveled to Japan in August was 169,800, which represents a drop of 93% compared to the month of August in 2019 before the epidemic. The entry restrictions of the United States and Europe have been loosened before those of Japan, and as a result, the demand for tourism all over the world has significantly increased.

According to projections made by the United Nations World Tourism Organization (UNWTO), the number of international visitors to the world’s destinations will reach approximately 250 million between the months of January and May of 2022, representing a year-on-year increase of approximately three times as much. When compared to 2019 before the outbreak, it has returned to its previous level of 50%.

According to projections made by the World Tourism Organization, by the year 2022, the level of tourism in Europe will have returned to between 65 and 80% of what it was before the outbreak, and tourism in the Americas will have returned to between 63 and 76%.

As a result of Japan’s easing of its port management, Mizuho Research & Technologies’ Rino Onodera predicts that the number of tourists who visit Japan in 2023 will reach approximately half (48%) of what it is in 2019, which is approximately 15.3 million people. She is of the opinion that there will be a 0.74% increase in Japan’s GDP in 2023 as a direct result of the easing policies (at the annual rate of April-June 2022).

The real Gross Domestic Product increased at an annualized rate of 3.5% from April to June 2022, but the outlook is clouded by higher prices and a slowdown in the economy of the rest of the world. The total amount of goods and services purchased by tourists who traveled to Japan in 2019 amounted to 4.8135 trillion yen. The continued recovery of the number of tourists who visit Japan will be beneficial to the economies of many different regions throughout Japan.

Yoshino Hoshino, who is the representative of the Hoshino Group, is looking forward to this, and he says that “the depreciation of the yen has become the east wind.” The exchange rate for one US dollar was approximately 109 yen at the end of 2019, but it has since depreciated to around 140 yen, which is a loss of approximately 30% of its value. Travel to Japan can be had for a reasonable cost by visitors from other countries.

Prior to the outbreak, Chinese travelers made up thirty percent of all visitors to Japan, and their spending there made up forty percent of the country’s total inbound consumption. At the end of 2019, the rate of exchange for RMB was approximately 15 yen per yuan; however, it has since increased to approximately 20 yen.

There are also people who believe that the recovery of consumption and the increase in the number of tourists visiting Japan “will take a certain amount of time,” such as Nomura Nomura’s Nomura Research Institute.

China has not abandoned its policy of “clearing the new crown” and has not loosened its grip on the strict control of its trade relations with other countries. According to what Kiuchi had to say, “if higher prices and tighter currencies lead to a slowdown in overseas economies, many countries may experience a trend of reducing overseas travel.”

Even though some restrictions on port management were eased in October, there are still some barriers preventing tourists from entering Japan. The reason for this is that, in general, visitors from other countries are required to have three doses of vaccines that have been authorized by the Japanese government.

There are a significant number of people who have traveled outside of the country but have not received all three recommended vaccinations. These travelers are required to go through nucleic acid testing and provide a negative certificate before leaving the country. This is also the case with many vaccines manufactured in China, which the government of Japan has not given its blessing to use.

Some countries in other parts of the world have scaled back their testing programs because, according to some opinions, the process of testing takes both time and money.

As a result of the rapid spread of the pandemic, Japan instituted a system that uses specialized personnel and locations to verify the vaccination history and general health of individuals entering the country. As more people arrive, there is a greater possibility that the amount of work will also increase.

In order to bring the number of tourists who visit Japan back up to where it was before the pandemic, efforts need to be made to bring port management closer to the way it was before the pandemic.

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