Forward Outlook

Economic and Political Outlook

The next election for the Japanese House of Representatives (the lower house of parliament) must be held by September 2009. Despite its low level of popular support, The Economist reports that the ruling Liberal Democratic Party (LDP) is likely to fend off the opposition's attempts to bring about an early general election.

The Economist Intelligence Unit (EIU) reports that an announcement regarding a rise in the consumption tax, probably to 7 per cent (from 5 per cent currently), will not be made until 2009 at the earliest, and any increase will not take effect before 2011.

Japan’s economic outlook is weak: GDP is forecast to grow by 1 per cent in 2008 and 1.2 per cent in 2009.

Japanese consumer confidence fell to its lowest level since the government started keeping records back in 1982, due to high gas and food prices. Wages grew by just 0.2 per cent in May, while cost of living rose 2.4 per cent in the same month.

Tourism Outlook

While it is expected that visitor arrivals out of Japan will continue to decline for a while yet, there is potential to improve the quality and spend of Japanese visitors. In future, Japanese visitors will be looking for different products, to stray from the beaten track and travel more independently.

Tourism New Zealand is focused on targeting the 55+ active senior group and luxury travellers through IMP activity, online and work with trade partners. We also continue to target school groups, the future of tourism to New Zealand.

A major Japanese travel company, JTB, is forecasting outbound travel from Japan will be down at least five per cent for 2008 to 16.4 million travellers. The largest decrease will be in long-haul travel as fuel surcharges impact consumer demand.

Source: Tourism New Zealand Regional Rap, www.economist.com (Japan Country Briefing)