How Will It Benefit Japan’s Economy?
By the way, the soccer match against Australia on the 4th in the final round of the Asian qualifiers for the FIFA World Cup had a dramatic ending.
When Australia goaled first, I bet everyone thought Japan might not be able to see its national team qualify for the World Cup at that match on its home turf in Japan. Then, there was a penalty kick during the injury time in the second half. The goal electrified everyone.
I hope to see Japan benefit from the massive economic influence of the World Cup. For your information, according to one study the FIFA 2006 World Cup in Germany generated an economic effect of approximately 500 billion yen in Japan. The current national team includes many star players who belong to and play for top-class club teams overseas. Japan is likely to see a fairly decent economic effect because of the World Cup, even though the team is playing on the other side of the world next year.
Industries will try desperately to share in the special demand generated by the World Cup. I’m paying particular attention to the retail sector, among others. This sector is most vulnerable to the consumption-tax rate increase, which will take effect next April. The last time we had an increase in the consumption tax rate (April 1997), household spending plummeted as a reaction to the rush in consumer spending before the tax increase, with the retail industry seeing a 13.0% rise in corporate bankruptcies in 1997 as compared to the previous year.
Retailers are faced with a harsh reality because, this time, they are legally prohibited from using such enticing phrases as a “consumption-tax reduction sale.” Hopefully, domestic consumption as a whole–led by home electronics–will be stimulated by fact that Japan has qualified for the World Cup in Brazil, regardless of the tax increase.