The COVID-19 pandemic and its impact on the Japanese economy

The article overviews the COVID-19 situation in Japan and its impact on the country's economy. As of the beginning of August 2021, the cumulative cases of coronavirus in Japan reached 0.9 million, of which about 15 thousand were lethal. At the same time, the cumulative cases in the world exceeded 198 million, and deaths - 4.2 million. The top five countries in terms of cumulative cases include the United States, India, Brazil, Russia, and France. According to this indicator, Japan ranks 33rd in the world. In Japan, the COVID-19 situation is not as serious as in the abovementioned states. However, its economy has also suffered significant damage. Japan's GDP decreased by 4.7 % in 2020 (its decline was estimated in the range from 4.7 to 7.3 %). Three additional budgets to finance anti-crisis packages have increased state budget borrowings. As a result, the share of borrowings amounted to 64.1 %, which is significantly higher than in 2009 (52.1 %) - the year of the global financial crisis. Unemployment increased for the first time in 11 years, and automotive industry, tourism, and public catering were among the industries most affected by the pandemic. The Olympic Games in Tokyo were held without spectators (both foreign and local), and local firms could not gain the 4 trillion yen which was estimated to be the expenses of foreign tourists. The pandemic also had a negative impact on value chains, reducing Japan's foreign trade in the first half of 2020. However, its dynamics recovered quickly. COVID-19 caused an increase in online trade, and also provoked a "restructuring" of the national labor market (due to anti-epidemic measures, the share of remote workers has significantly increased). In general, the pandemic has had a negative impact on the economy and society of Japan. But the national government sees an opportunity in every crisis. Thus, it is expected that one of the consequences of the pandemic will be structural changes in the economy, and local firms will invest more in digitalization and green technologies.