TOKYO: The Japanese government’s decision to exclude trips to and from Tokyo from its “Go To Travel” tourism promotion campaign drew various responses from economists, with one estimating the loss of economic effects at some 1.5 trillion yen.

Takahide Kiuchi, executive economist at Nomura Research Institute Ltd., initially gave an estimate that the campaign to cover 50 percent of the travel costs through discounts and vouchers will push up the country’s overall consumption by 8.7 trillion yen annually, but now expects the annual consumption boost to be reduced by 1.54 trillion yen due to Tokyo’s exclusion, which came after new coronavirus cases began to increase again in the Japanese capital.

“The government should not have started the campaign at a time when infections are spreading,” Kiuchi said.

The government has allocated a budget of 1.35 trillion yen for the campaign, which started on Wednesday. It was originally set to cover the whole country.

Toshihiro Nagahama, chief economist of Dai-ichi Life Research Institute Inc. expects the campaign’s demand generation effects to be reduced to about 60 percent of the initially projected level.

“The campaign may be cooling demand instead of stimulating it,” Nagahama said. “If infections spread as a result of increased movements of people and restrictions on economic activities are introduced again, the campaign may rather end up creating a massive loss.”

Meanwhile, Yutaro Suzuki, economist at Daiwa Institute of Research Ltd., proposed pursuing new forms of travel by utilizing the campaign. “In areas where COVID-19 is not spreading, people may as well enjoy so-called microtourism, by touring around with their private cars to discover local attractions,” Suzuki said.

JIJI Press