Mizuho Economic Outlook & Analysis
The Economic Impact of the 2020 Tokyo Olympic Games
October 17, 2014
Economic Research Department
Copyright Mizuho Research Institute Ltd. All Rights Reserved.
Estimation of the impact of the Olympic Games (as a driver of GDP) from a
macroeconomic approach
 In the former Olympic host countries, the rate of real GDP growth has tended to show an uptick five years prior to and
including the year of the Games compared with the trend line of six to ten years prior to the Games.
Convention year
Real GDP trend
6 to 10 years before
convention
70
65
60
(2000 = 100)
60
(2000 = 100)
Canada (Montreal)
Convention year
70
50
65
40
30
45
20
Real GDP trend
6 to 10 years before
convention
10
30
62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77
(2000 = 100)
100
80
90
70
Convention year
55
50
China (Beijing)
(2000 = 100)
(2000 = 100)
130
Convention year
110
90
100
50
88
90
(2000=100)
350
150
92
94
96
98
UK (London)
Real GDP trend
6 to 10 years before
convention
Convention year
Convention year
90
80
Real GDP trend
6 to 10 years before
convention
90
00
(CY)
Greece (Athens)
130
120
50
170
Convention year
(2000 = 100)
140
Australia (Sydney)
100
60
86
78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93
(CY)
110
60
82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97
(CY)
400
0
74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89
(CY)
70
Real GDP trend
6 to 10 years before
convention
Real GDP trend
6 to 10 years before
convention
10
80
70
60
20
120
Real GDP trend
6 to 10 years before
convention
80
65
30
35
USA (Atlanta)
110
75
40
50
30
Convention year
85
55
66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81
(CY)
(2000 = 100)
Spain (Barcelona)
90
50
40
0
(CY)
Convention year
60
45
40
35
Convention year
Real GDP trend
6 to 10 years before
convention
South Korea (Seoul)
70
60
55
50
(2000 = 100)
USA (Los Angeles)
75
92
94
96
98
60
00
02
04
(CY)
Japan (Tokyo)
(2000 = 100)
130
Real GDP trend
6 to 10 years before
convention
70
50
94
96
98
00
02
04
06
08
(CY)
There is an inclination for economic growth
to outpace the trend lines
(1991 = 100) Former West Germany (Munich)
75
Convention year
125
300
IMF Forecast
130
120
110
115
90
110
70
105
250
200
150
Real GDP trend
6 to 10 years before
convention
100
50
98
00
02
04
06
08
10
12
(CY)
50
02
04
06
08
10
12
14
16
(CY)
Real GDP trend
6 to 10 years before
convention
100
10
12
14
16
18
20
22
24
(CY)
Sources: Made by Mizuho Research Institute ( MHRI) based upon data releases by institutions including the IMF, CEIC, Haver, Federal Statistical Office of Germany, and Statistics Canada.
1
The 2020 Tokyo Olympics has the potential to push up real GDP by JPY36 trillion
 The 2020 Tokyo Olympics would push up real GDP by an annual average of +0.3% pt during the period from 2015 through
2020 (total additional growth of JPY36 trillion).
―― The “boost” to real GDP is based upon the average boost observed in the former host countries (ex South Korea, China
and the UK*)
(*) South Korea, and China were excluded since the Olympic Games coincided with periods of rapid economic expansion in the respective
countries. The UK was excluded as the Games were held in the wake of the severe recession that followed the collapse of Lehman
Brothers.
―― Japan’s real GDP may reach approximately JPY600 trillion in 2020 due to the effects of the Olympic Games
and “Abenomics”.
[ The impact of the 2020 Tokyo Olympic Games in boosting real GDP ]
(JPY trillion)
620
GDP reaches JPY600 tril
600
Mizuho Research Institute (MHRI)
medium-term forecast
Impact of the
convention of the
2020 Tokyo
Olympic Games
580
Impact of
"Abenomics"
560
540
FY2010～FY2013 trend
520
500
10
11
12
13
14
15
16
17
18
19
20
(FY)
Source: MHRI.
2
The impact of the Olympics analyzed: three phases and two effects
After the Games
During the Games
Before the Games
Direct impact
Incidental impact
▼ Rise of construction investment (games facilities,
Olympic village, etc.)
▼ Rise of consumption expenditures (related goods,
household electrical appliances, etc.)
▼ Rise of stock and land prices and the accompanying wealth effect
▼ Increase in the number of foreign tourists and international events
such as conferences
・ Synergy effect created by an improved image and by
promotional and other measures
▼ Acceleration in urban infrastructure improvements, revitalization
of private-sector investment
・ Acceleration of public infrastructure improvements
(earthquake resistance, barrier-free structures, transportation
infrastructure, etc.)
・ Reactivation of renovation investments by private-sector
entities such as hotels and retail concerns
▼ Games-related expenses (operating expenses,
IT systems, etc.)
▼ Spending by spectators (accommodations, travel,
transportation, meals, etc.)
・ Spending by foreign tourists (spectators)
・ Spending by domestic tourists (spectators)
▼ Consumer spending (Olympic-related goods, household
electrical appliances, etc.)
▼ More tourists visiting regional areas
・ Promotion of regional tourism by attracting foreign Olympic
spectators
▼ Increase in sports-related spending
・ Increased spending inspired by Olympic athletes
▼ Effective use of the Games facilities (such as for parks)
▼ Redevelopment of the Games sites
▼ Upward trend in the number of foreign tourists
・ Improved image due to success of Olympic Games
▼ Improved competitiveness and productivity of urban areas
・ The benefits of improved infrastructure and revitalized privatesector investments
▼ Increase in sports-related spending
・ Increased spending inspired by Olympic athletes
Source: Made by MHRI.
3
Estimation of the direct impact
 The Olympics will likely create new demand worth JPY1 trillion from the construction of Games facilities, increase in the
number of tourists, and other effects.
 The total production inducement effect will likely amount to JPY2.5 trillion, including the secondary ripple effect
(production inducement from increased spending owing to the increase in income from the primary ripple effect).
 Creation of 209,000 jobs is expected, mostly in the construction, retail and service sectors.
[ New demand ]
Total new demand
[ Economic ripple effect ]
JPY989.0 bil
＜Breakdown＞
(1) Facility improvement
JPY455.4 bil
(permanent structures and overlay*)
(2) Games operating expenses JPY205.0 bil
(venue rents, operating expenses, IT systems, etc.)
(3) Spending by spectators
JPY207.4 bil
(accommodation, transportation, meals, etc.)
(4) Other household spending JPY121.2 bil
Production inducement
JPY2.5 tril
Increase in income
JPY0.6 tril
Job creation
(no. of new employees) 209,000
＜Breakdown＞ Construction
Wholesale & retail
41,000
58,000
Services for businesses 30,000
Services for individuals 25,000
Others
55,000
(purchases of related goods)
Notes: 1. The economic ripple effect was calculated on the basis of the 2005 Input-Output Tables by the Ministry of Internal Affairs and Communications.
2. Overlay* refers to temporary facilities and structures used only during the Olympics.
Source: Made by MHRI.
4
Major Olympics-related sectors can push up private-sector investment
by approximately JPY10 trillion
[ Capital investment by four Olympics-related sectors in the Tokyo metropolitan area ]
(JPY trillion)
16
Base line
15
Increase
by JPY10
trillion
on a
cumulative
basis
When taking the Olympic effect into consideration
14
13
12
11
10
9
8
1990
95
2000
05
10
15
20
(CY)
Notes:
Capital investment by the four Olympics-related sectors (services, real estate, transportation & communications, wholesale & retail)
in the Tokyo Metropolis and Kanagawa, Chiba and Saitama Prefectures. Based on 1990 prices.
Source: Made by MHRI based upon Cabinet Office, Private Capital Stock by Prefecture, and others.
5
Winning the bid for the Olympics appears to stimulate the host country’s inbound
demand over the long haul
[ Number of inbound tourists before and after the Olympics ]
Spain (1992)
(Million tourists)
110
100
70
Sydney Olympics
(2000)
7
5
Bid for Olympics won
(1986)
16
Bid for Olympics won
(1993)
40
30
Trend line for the 10 years prior to and including the year
when the bid was won
4
12
3
10
2
8
20
1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010
1
Trend line for the 10 years prior to and including the year
when the bid was won
Note:
No. of foreign tourists to Spain (including day trips).
Source: Venancio Bote Gómez (1994)、Instituto de Estudios Turistiscos, and others.
Trend line for the 10 years prior to and including the year
when the bid was won
6
4
0
(CY)
Bid for Olympics won
(1997)
14
60
50
Athens Olympics
(2004)
18
6
Establishment of EU
(1993)
80
(Million tourists)
(Million tourists)
Barcelona Olympics
(1992)
90
Greece (2004)
Australia (2000)
1984 1987 1990 1993 1996 1999 2002 2005 2008 2011
(CY)
Note: No. of arrivals of foreigners staying for one year or shorter.
Source: Australian Bureau of Statistics
China (2008)
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
(CY)
Note:
No. of foreign tourists visiting Greece.
Sources: Greek National Tourism Organization, National Statisitical Service
of Greece, World Bank.
UK (2012)
(Million tourists)
Bid for Olympics won
34
(2005)
(Million tourists)
Beijing Olympics
(2008)
30
Bid for Olympics won
(2001)
25
Accession to WTO
(2001)
London Olympics
(2012)
32
30
20
28
15
26
10
5
24
Trend line for the 10 years prior to and including the year
when the bid was won
0
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
(CY)
Note: No. of arrivals of foreigners (ex visitors from Hong Kong, Macau and Taiwan).
Source: China National Tourism Administration.
22
Trend line for the 10 years prior to and including the year
when the bid was won
20
1996 1998 2000 2002 2004 2006 2008 2010 2012
(CY)
Note: No. of foreign visitors to the UK (including day trips).
Source: Office for National Statistics.
6
The number of foreign visitors to Japan exceeded 10 million in 2013
 The number of foreign visitors to Japan topped 10 million in 2013 thanks to the weaker yen and more accommodative visa
requirements.
[ Trends in the number of foreign visitors to Japan ]
(10,000)
1200
South Korea
NIES (ex South Korea)
USA and Europe
Total
China
Southeast Asia
Others
10.36 million
1000
800
600
400
200
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
(CY)
Note:
“NIES (ex South Korea)” refers to Hong Kong, Taiwan and Singapore. “Southeast Asia” refers to the five countries of
Thailand, Malaysia, Indonesia, Vietnam and the Philippines, for which visa requirements were eased in July 2013.
Source: Made by MHRI based upon Japan National Tourism Organization, Honichi gaikyakusu no doko (Trends in the number
of foreign visitors to Japan).
7
The bulk of foreign visitors are from Asia
 The percentage share of Asian visitors has risen from roughly 70% to about 80% over the last 10 years.
[ Changes in the number of foreign visitors (Total vs. from Asia) ]
(10,000 visitors)
(%)
Total
1200
78.3
80
Asia
1000
Percentage of Asian visitors (right scale)
75
800
600
70
67.4
400
65
200
60
0
2003
04
05
06
07
08
09
10
11
12
13
(CY)
Sources: Made by MHRI based upon releases by Japan National Tourism Organization (JNTO).
8
The number of foreign visitors to Japan may top 20 million in 2020 through the promotion of
Olympic-targeted measures
 The number of foreign visitors to Japan could top 20 million in 2020, and 30 million in 2030.
[ Projection of the number of foreign visitors to Japan ]
(10,000 persons)
Taking the Sydney Olympics scenario
(boost of 15.5%: 29.06 million)
3000
Taking the Sydney Olympics scenario
(boost of 22.4%: 21.69 million)
2500
30 million in
2030
More than 20
million in 2020
2000
Trend in 2003-2007
1500
Economic impact of the
Olympic Games
No. of foreign visitors to Japan
1000
500
0
1980
1990
2000
2010
2020
2030
(CY)
Notes: In projecting the number of foreign visitors in 2020 and 2030, the scenario of the Sydney Olympics was adopted,
where the number of inbound tourists to Australia outpaced the past trend by 22.4% during the year of the Olympics
and by 15.5% 10 years after winning the bid, and the boosting effect was factored in on top of the 2003-2007 trend
line accordingly.
Sources: Made by MHRI based upon releases by Japan National Tourism Organization (JNTO) and others.
9
Spending by foreign tourists to Japan could create an added value of JPY3 trillion
[ Economic impact of the increasing number of foreign visitors ]
2013
Increase in the number of
foreign visitors (10,000 visitors)
2020
-
400
Cumulative
impact
over
seven years
1,600
Before winning the bid
1,036
1,769
-
After winning the bid
1,036
2,169
-
Spending per visitor (10 thousand yen)
15.8
17.4
-
Economic effect per visitor (10 thousand yen)
17.8
19.5
-
-
0.8
3.1
Added value (trillion yen)
Notes: 1. We have estimated that the number of foreign visitors in 2020 will reach 21.69 million owing to the Olympic Games.
2. In the backdrop of the Olympic Games, we have also estimated that the number of foreign students will increase to 300,000 (2013: 136 thousand
students), and that the number of foreign workers will also rise, mainly in the construction sector due to the increased construction investment
related to the Olympic Games. (① Construction workers will increase by 70,000 in six years, ② 200,000 foreign houseworkers will come to
Japan annually through 2020, and ③ the number of foreign workers with resident status, particularly those highly skilled, will increase by 206 thousand
on the back of a two-fold increase in foreign direct investment in Japan). As a result of such increase, we have assumed that the share of visitors
coming to Japan to study or to attend conferences or for other business purposes will also expand.
Sources: Made by MHRI based upon releases by Japan National Tourism Organization (JNTO) and others.
10
This publication is compiled solely for the purpose of providing readers with information and is in no way meant to
solicit transactions. Although this publication is compiled on the basis of sources which we believe to be reliable and
correct, Mizuho Research Institute does not warrant its accuracy and certainty. Readers are requested to exercise their
own judgment in the use of this publication.
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