IMF chief says Tokyo Olympics change no harm to Japan economy

Mar 31 , 2021. 3 hours ago – 06:49. KYODO NEWS

Undated file photo shows International Monetary Fund Managing Director Kristalina Georgieva. (Kyodo) ==Kyodo

WASHINGTON – International Monetary Fund chief Kristalina Georgieva said Tuesday that Japan’s economic recovery will not be derailed by staging the Tokyo Olympics without overseas spectators, while hailing the country’s “strong response” to the coronavirus pandemic.

“In terms of economic impact (from the change in the games), it would be very minor. We’ve done some calculations and we concluded that it is not going to harm the Japanese recovery,” the IMF managing director said in an online interview with Kyodo News.

As for Japan’s growth forecast for this year, the Washington-based institution is expecting an upward revision from its January projection that the world’s third-largest economy will grow 3.1 percent, she suggested. The IMF will release its flagship report on the world economy next week.

Her remarks came as the organizing bodies of the Tokyo Olympics and Paralympics formally decided earlier in the month that this summer’s games will bar spectators from other countries due to the coronavirus pandemic.

While expressing regret that many people will not be able to enjoy the events in person, Georgieva said there will still be hundreds of millions of viewers and Japan has “a very diversified and vibrant economy,” which is not dependent on revenues from the games.

She also said the decision to hold the Olympics at this point is “clearly justified” by progress that has been made so far in coronavirus vaccination efforts.

Japan has also responded properly, swiftly and effectively to both the health crisis and the economic downturn that it triggered, through such means as massive fiscal stimulus and monetary easing, according to Georgieva.

“It is this strong response that put the floor under the Japanese economy, but also helped us as a world to prevent much worse outcomes in this crisis,” she said.

On the increasing rivalry between the United States and China, which she views as the “two engines” powering the global economy, the IMF chief called for more collaboration, instead of confrontation.

“It is, of course, much better for the world economy, and for these countries, to have more collaboration and to rely on trade as an engine for growth,” Georgieva said, adding that the role of her international financial institution is to provide a “space for dialogue” where solutions can be sought and found.

Such dialogue “is the only way for us to have a more prosperous world, one where we want to rely on collaboration, not one that is driven by confrontation,” she said.