The coronavirus outbreak is expected to affect Japan’s economy by hurting tourism to the nation, said Fumio Kishida, the chairperson of the ruling Liberal Democratic Party’s (LDP) Policy Research Council.
“There will definitely be an impact on the economy,” Kishida told national broadcaster NHK yesterday.
He said that the outbreak “has already been prompting cancelations one after another, affecting the tourism industry.”
The virus is posing a challenge to Japanese Prime Minister Shinzo Abe’s target of increasing the number of foreign visitors to 40 million this year, when Tokyo hosts the Olympic games.
Chinese tourists accounted for 40 percent of spending by foreign tourists in Japan last year, Bloomberg lead economist Yuki Masujima said.
Abe said on Friday that Japan would bar entry to people with symptoms of the coronavirus effective Feb. 1.
China banned all outgoing overseas group tours starting on Jan. 27.
In addition to the virus outbreak, there are downside risks to Japan’s economy, including the UK’s departure from the EU and tensions in the Middle East, Kishida said.
That makes it important to implement the stimulus package compiled late last year, he added.
In December last year, Abe announced a stimulus package totaling around ￥26 trillion (US$239.86 billion) to support growth in an economy contending with an export slump, natural disasters and the fallout from a recent sales tax increase.
The rapid spread of the coronavirus pandemic is likely to loom large in the minds of economists in the coming days as the number of global cases soars and the effect on commerce spreads.
While the WHO did not recommend any restrictions on travel or trade when it declared the outbreak a global health emergency, more than two-thirds of China’s economy will remain closed as a result of the virus this week, and disruption could spread further.
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