THE JAPAN NEWS



 

The nation moved a step toward the normalization of economic activities when the state of emergency for Tokyo and three neighboring prefectures was lifted on March 21.

However, full-fledged economic recovery is likely to take time, as many restaurants and retail stores are planning to continue shortening their operating hours with no end in sight to the coronavirus pandemic.

Many private-sector economists forecast the real economic growth rate for the January-March period will fall in the range of 5% on an annualized basis compared with the previous quarter due to the state of emergency, which lasted about 2½ months. Most economists expect the economy to return to positive growth in the 5% range in the April-June period.

Even so, the economic losses incurred during the state of emergency have been significant.

Takahide Kiuchi, an executive economist at Nomura Research Institute, estimates that about ¥6.3 trillion in consumer spending has been lost. He also sees an additional ¥180 billion being lost if restaurants in the four prefectures continue to shorten their operating hours to 9 p.m. until the end of March.

According to Kiuchi, Japan’s economic recovery may be slower than that of major countries. “Japan lags behind Europe and the United States in vaccinations and the delay may make a difference in the pace of economic recovery,” he said.

Many restaurant operators think customer numbers in the evening will take time to recover even though the state of emergency has been lifted.
Family restaurant chain Saizeriya is planning to close most outlets by 10 p.m., but its restaurants in Tokyo and some other areas will close at 9 p.m. Watami Co., the operator of the Mirai Zaka pubs, will continue to close early in accordance with requests from local governments.

The travel and transportation industries, both of which have been hit hard by the sharp decline in the number of tourists, are unlikely to see an upturn in their business performance in the immediate future.

The government’s Go To Travel tourism promotion campaign is expected to resume in stages after the end of the Golden Week holidays in May, and some major travel agencies think that a full resumption of the campaign may happen before the summer holidays.