TOKYO: Japan’s economy is expected to suffer a loss of about 699 billion yen ($6.4 billion) from a fresh state of emergency over the novel coronavirus that is set to go into effect in Tokyo and three other prefectures on Sunday, a private-sector economist has suggested.

The economic impact is likely to spread further as the government is expected to expand the scope of areas to be covered by the virus emergency and extend the period of the measure, according to Takahide Kiuchi, executive economist at Nomura Research Institute Ltd. 

The 17-day emergency in the country’s capital and the western prefectures of Osaka, Hyogo and Kyoto through May 11 will strongly affect economic activities, with requests for business restrictions to be made to a wide range of sectors, including retailers, hotels and entertainment facilities, as well as eating and drinking establishments, Kiuchi said.

“Many businesses, mainly small firms, are expected to go bankrupt or close down, leading the employment situation to deteriorate,” he said.

If Kanagawa, Chiba and Saitama prefectures, all neighboring Tokyo, are added to the list of prefectures under the virus emergency and the emergency period is extended to two months, the economic impact would be as much as 3,864 billion yen, Kiuchi said, adding that there is the possibility of the country’s real gross domestic product in April-June posting negative growth for the second consecutive quarter.

JIJI Press