Canceling the Tokyo 2020 Olympic Games because of the coronavirus outbreak would reduce Japan’s annual gross domestic product (GDP) growth by 1.4 percent.
According to Kyodo News, the report by SMBC Nikko Securities Inc. projects that Tokyo 2020 would create demand through spectator consumption and the staging of sporting events totaling ¥670 billion ($6.4 billion) and the cancellation of the Olympics would deplete Japan’s GDP by about ¥7.8 trillion ($74.1 billion).
The agency believes that the Olympics will be canceled if the spread of coronavirus, officially named COVID-19 by the World Health Organization, continues until July—the month in which the Games are due to begin.
Under that scenario, corporate revenues would drop 24.4 percent this year, compared with 2019.
Also presented in the report was a scenario under which the spread of coronavirus ends next month, with the Olympics being held as scheduled from July 24 to August 9 and the economic fallout from the outbreak limited to a 0.9 percent fall in GDP growth.
Corporate revenues would likely decline by 14.9 percent under that scenario.
The International Olympic Committee (IOC) has repeatedly stressed Tokyo 2020 will take place as planned amid suggestions the event could be canceled or postponed because of fears over coronavirus, which has spread to more than 100 countries.
IOC President Thomas Bach claimed canceling or postponing Tokyo 2020 had not even been mentioned during a two-day IOC Executive Board meeting which concluded in Lausanne last Wednesday.
But the German lawyer conceded the virus was a “major subject of discussion” at the meeting.
Last month, the Japanese economy went sharply into reverse in the final months of 2019, with the country entering the final stages of preparations for the Tokyo 2020 Olympic and Paralympic Games.
GDP for the fourth quarter is said to have fallen at a 6.3-percent annual rate.
The decline is being blamed on an increase in consumption tax.
Bach has earlier reassured athletes the organization will find solutions to challenges posed by the coronavirus outbreak on their attempts to qualify for Tokyo 2020.
In a letter published on the Athlete365 platform, Bach reiterated his promise of a “fair” process for this year’s Olympic Games following the cancellation and postponement of numerous qualifiers because of the virus, which he described as being a “major concern for all of us.”
The IOC president also thanked athletes for their “flexibility and solidarity” after some were forced to change their competition schedule, training and travel plans at short notice when their competitions were relocated.
“Of course, we know that the ongoing Olympic qualification is challenging and that it requires a lot of flexibility from you, your National Olympic Committee [NOC] and your International Federation [IF],” Bach wrote.
“Some of you had to change your competition schedule, training and travel plans because of venue changes and travel restrictions,” he said. “I want to personally thank you for all this flexibility and solidarity, which is the true Olympic spirit.”
“Rest assured that the IOC continues to work hard with the NOCs and the IFs to find solutions for these challenges and to ensure a fair Olympic qualification under these circumstances.” Insidethegames