People walk at Shibuya Station in Tokyo, Japan, January 9, 2021.
Du Xiaoyi | Xinhua via Getty
SINGAPORE – Japan’s latest emergency declaration in some parts of the country is unlikely to have a major impact on the economy, economists told CNBC.
“The economic impact of the measures announced will be less compared to the previous one,”; Shigeto Nagai, head of Japan economics at research firm Oxford Economics, told CNBC in an email.
He cited Japan’s nationwide emergency announced in April 2020, just before the coronavirus outbreak. The state of emergency at that time ended at the end of May.
The latest emergencies in Tokyo, Saitama, Chiba and Kanagawa through February 7 were announced by Japanese Prime Minister Yoshihide Suga last week to combat the latest high-profile coronavirus infection.
The emergency is set to expand to other areas, with local media reporting Suga will add seven more prefectures, including Osaka.
Japan recorded more than 298,000 confirmed cases of COVID-19, while at least 4,192 people died, according to NHK broadcaster.
Affect Japan in a limited extent
Oxford Economics’ Nagai has cited a number of factors to describe the limited economic impact, including business restrictions that are mostly targeted at local restaurants and bars under emergencies.
The opening hours of the food and beverage restaurants in those areas will be shorter, according to Suga’s announcement last week. People are also prevented from going out after 8.00 p.m. for unnecessary and urgent reasons.
The number of people commuting to the workplace is reduced by 70% with long distance communication. However, schools and kindergartens will not close this time.
Marcel Thieliant, senior Japanese economist, told CNBC: “The restrictions are very mild and most of them affect eating out and entertainment, which together account for about 3% of GDP.”
“Since the emergencies last for only a month, expansion to the Kansai region will not result in more than 0.1% of GDP traction,” Thieliant said, referring to the latest emergency measures reported to be extended. To other areas
“We still think the emergency situation will expand across the country and make it more stringent, with shops and restaurants asking them to close altogether,” he said, adding that Capital Economics expects consumption to be 1.5 percent lower than that. Quarter to quarter in the first period Quarter if happened
Suga’s political future
The handling of the COVID-19 situation in Japan could affect the prospect of a new election for Suga, who took office last year after the unexpected resignation of his predecessor, Shinzo Abe, due to concerns about the coronavirus outbreak. health
Oxford Economics’s Nagai warned that Suga, who had an approval rating. “The sharp decline in the past few weeks” will be dealt with. “Severe” if an emergency situation is unsuccessful and needs to be extended by more than a month.
“In addition to numerous political scandals, Suga’s lack of leadership in dealing with COVID-19 (Suga) has been heavily criticized,” Nagaik said. Fall after the Olympics and (The Liberal Democratic Party may begin to look for other leaders to win the election. “