【Aging, safety net and fiscal crisis in Japan】No.228: The surplus in travel balance is approaching zero

Travel balance is one of the items in the balance of payments. It is calculated by subtracting the amount spent by Japanese tourists abroad from the amount spent by foreigners visiting Japan. As shown in Figure 1, Japan's travel balance went from having a deficit of JPY 1,296 billion in 2011 to a surplus of JPY 2,702 billion in 2019, making it one of the engines of economic growth. This is a result of the government's efforts to actively attract foreign tourists.

However, as mentioned in Column No.222, the number of foreign tourists was almost zero in March 2020 due to the spread of COVID-19. The Ministry of Finance released a preliminary figure for the travel balance of March 2020, which revealed the impact of COVID-19. The surplus fell sharply from JPY 267 billion in January 2020 to JPY 25 billion in March 2020 (Figure 2).

Figure 1: Annual change in travel balance

Figure 2: Monthly change in travel balance