On 12 April, Japan will begin vaccinating citizens age 65 and older, the largest segment of the country’s population.
At the expected pace of inoculation, the nation’s economic recovery will be “stop and go” until herd immunity is achieved around the end of this year, according to economists at Japan’s Norinchukin Research Institute.
Most economists believe that will boost the economy to pre-pandemic levels by July 2022, but Takuto Murase, senior economist at the Japan Research Institute, believes the country will reach that milestone earlier next year.
“It is the elderly who voluntarily haven’t gone out and have been stuck at home,” he said in an interview with the Japan Times.
“Once the vaccination of older people progresses” and this 36-million-strong demographic starts visiting shops and restaurants again, “the economy should start showing clearer signs of a gradual recovery,” he said.
However, the sluggish pace of vaccinations in Japan will put its return to economic normal about a year behind that of the U.S., the JT reported.
“The biggest reason why Japan’s recovery is slower than the U.S. comes from the difference of the size of the economic stimulus,” Taro Saito, research fellow at NLI Research Institute, told the JT.
“Japan’s stimulus is giant but still pales in comparison to that of the U.S.,” he said.
The U.S. has so far pumped about $4 trillion into its economy during the pandemic and global lockdown, more than any other country. Japan’s rescue spending ranked second in the world at the equivalent of about $2.2 trillion.
Japan’s economy shrank at an annualized rate of -29.3 percent in 2020’s second quarter, and a second government-imposed lockdown hobbled a nascent recovery.
The country’s GDP will expand by 5.8 percent in the current quarter, Saito predicted.