The Tokyo Olympic Games, which had originally been scheduled for 2020, were postponed to 2021. Despite calls for it to be cancelled because of concerns that the COVID-19 there may get much worse, and the Olympics may bring more risks than economic benefits, the Japanese government finally confirmed continuing with the Tokyo Olympics as planned as potential losses might be greater if it is cancelled. Moreover, numerous related businesses will be affected, and Japan would miss a long-awaited opportunity to be a host to one of the world's most important sporting events.
Benefits of the Tokyo Olympic Games to Japan's economy may be limited and Japan's high debt will likely be compounded by losses from organizing this sporting event. KResearch is of the view that the Japanese economy will grow 2.6 percent in 2021, because of the low 2020 base and favorable export performance despite persistent deflation and weak consumer purchasing power. Nevertheless, the number of COVID-19 infections in Japan has begun to surge again. If the surge cannot be curbed after the end of the Olympic Games, the Japanese economy may grow below our estimate.
Additional benefits of the Tokyo Olympic Games to Thai exports will likely be limited. KResearch is of the view that despite the going COVID-19, Japan's consumer purchasing power has begun to recover, supported by the low 2020 base, and this may support 2021 Thai shipments to Japan to resume growth for the first time in three years at 12.2 percent, equivalent to a record high of USD25.6 billion (or within a projected range of 11.0-13.1 percent or USD25.3-25.8 billion), led by automobiles/auto-parts, processed chicken products, machinery, chemicals and computers/related parts.