Although Japan was able to avoid the worst-case scenario of cancelling the Olympics and Paralympics, the postponement would incur major additional costs to the original budget. The cost of the Olympic and Paralympic Games had already increased in comparison to the originally planned budget, even before the COVID-19 crisis and the postponement. The fourth version of the budget plan of the Tokyo Organising Committee of the Olympic and Paralympic Games (TOCOG) estimated a total of 1.35 trillion Japanese yen, in comparison to the original estimate of around 730 billion Japanese yen that the government announced in 2013.
The Board of Audit of Japan, on the other hand, stated that the actual governmental expenditure had already reached approximately 1.06 trillion yen by the end of fiscal year 2018 (ending in March 2019), specifying that many measures closely connected to the Olympics and Paralympics were not included in the budget calculation from the TOCOG. Furthermore, the Tokyo metropolitan Government (TMG) also published in 2018 an additional cost of 810 billion yen to the TOCOG budget plan. In total, more than three trillion yen was said to be spent by the government on the Olympic and Paralympic Games even before the postponement.
One source in March 2020 estimated that the postponement would cost Japan an additional 640 billion Japanese yen, including the cost of the various sports organizations preparing another year for the games. Post-Olympic revenue would also be impacted, the proceeds from the housing and infrastructure built for the Olympic village, Harumi Flag, for example, would not generate income as expected.
The government originally projected an economic ripple effect between 2013 and 2030 of around 32 trillion yen generated by all projects related to 2020 Olympics and Paralympics. With the expected cost of the postponement and direct impact of the COVID-19 on Japans’ economy, it is not yet clear if this economic stimulus would materialize, and Japan is now in serious danger of a recession.