As the COVID-19 pandemic continues to severely affect countries across the world, Japan has found itself in a very bad situation that has made politicians consider what to do to aid the economy.
In May, it was reported that Japan’s economy had fallen into recession.. Japan’s economy was already facing issues before the pandemic, mostly due to the government’s decision to increase the sales tax from 8% to 10%.
Despite the multiple measures the government took so the consumption tax increase would not have the same terrible effects the country faced in 2014 when it raised the sales tax from 5% to 8%, the economy still took a massive hit because of the government’s decision. To make things worse, Japan’s economy had also struggled in 2019 because of tensions with South Korea and two strong typhoons that severely affected areas including Osaka, Kyoto, and Tokyo.
With the many problems Japan was facing, it was no wonder that the COVID-19 pandemic made it the largest economy to enter recession; and prognostics are not positive. Bloomberg forecasts that the Japanese GDP could contract more than 20% in 2020 because of the virus. After all, some of the most devastating effects to the Japanese economy include the plummeting number of exports, the postponement of the Tokyo Olympics, and the complete vanishment of tourism.
Since we have touched tourism…
In 2019, it seemed that every media company (including Japan Info) kept reporting on the record numbers of foreign tourists visiting Japan, as well as their pros and cons. However, the COVID-19 virus has brought tourism to complete halt, April seeing a 99.9% drop. This is not entirely surprising since Japan implemented a travel ban early on that now includes over 100 countries.
With salaries stagnating and consumer spending decreasing due to Abe’s decision to increase the sales tax, Japan has relied on the money foreign tourists inject into the economy; and while there is debate about whether relying on tourisms as opposed to strengthening domestic consumption is a colossal mistake, it is clear that the current administration wants to do everything it can to bolster tourism.
The Japan Times had reported that the government has come up with a plan to once again attract foreign tourists. This plan supposedly would have covered half of the foreign tourists’ expenses, and would have required ¥1.35 trillion ($12.5 billion).
Other outlets (ourselves included) wrote about this possibility after the news broke. Understandably, such implications caused a lot of talk outside Japan as people considered whether they would take advantage of said plan if it were approved.
However, after Japan Tourism Agency saw the rumors make headlines across the world, they quickly took to Twitter to dispel them:
Regarding reports by some news outlets that “The Japanese government is considering a campaign to help foreign tourists visiting Japan by offering support for half of their travel expenses,” please note that （１／２）
— 観光庁（Japan Tourism Agency） (@Kanko_Jpn) May 27, 2020
the Go to Travel Campaign under consideration by the Japanese government is to stimulate domestic travel demand within Japan after the Covid-19 pandemic and only cover a portion of domestic travel expenses.（２／２）
— 観光庁（Japan Tourism Agency） (@Kanko_Jpn) May 27, 2020
As it turns out, Japan will not be paying anyone 50% of their travel expenses.
However, the government does plan to promote domestic tourism, and it’s called the Go To Travel Campaign. If it comes into fruition, then the government will cover a portion of people’s domestic travel expenses.
Therefore, if you live in Japan and plan to travel domestically some time in the future, this campaign could be extremely beneficial.
: sakaki0325/