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Record spending by foreign tourists is providing a timely boost to the world’s third-largest economy.
Spending by visitors jumped to the highest level in at least 20 years, adding about 0.1 percentage points to Japan’s gross domestic product, data showed. That’s no small change for a country that’s trying to claw itself out of decades of economic stagnation.
“Tourism is an effective way for Japan to pull in the purchasing power of growing Asian markets,” said Yuichi Kodama, an economist at Meiji Yasuda Life Insurance in Tokyo. “Domestic demand is unlikely to gather momentum in the long run as the population declines.”
China is playing a big part, as is the slump in the yen, which has depreciated by more than a third against the dollar over the last three years.
Chinese visitors surged by 113 percent from a year earlier to more than 400,000 in April, and made up the biggest group of the record 1.8 million foreign visitors, according to the Japan National Tourism Organization. Spending by all visitors rose to 551.2 billion yen ($4.6 billion) in the three months through March, Cabinet Office data show.
About 174 million Chinese tourists are tipped to spend $264 billion on their travels by 2019, according to estimates by Bank of America Merrill Lynch. So there’s more money headed toward Japan.
This article was written by Keiko Ujikane from Bloomberg and was legally licensed through the NewsCred publisher network.