A new economic forecast paints a vibrant picture for Japan’s Kansai region, with growth expected to significantly surpass the national average over the next two years. The Asia Pacific Institute of Research (APIR) released its latest quarterly outlook, projecting a period of dynamic expansion for the area encompassing Osaka, Kyoto, and Kobe, largely driven by the upcoming Expo 2025 and a powerful resurgence in international tourism.
For travelers planning a trip to Osaka, this economic energy translates into a dynamic, evolving city, but it also signals a need for savvy planning. Here’s what the latest forecast means for your visit.
Kansai’s Economic Outlook: Strong and Steady Growth
According to the APIR report, the real Gross Regional Product (GRP) for the Kansai region is forecast to grow by +1.0% in fiscal year 2024. This figure is notably higher than the projected growth for Japan as a whole, which stands at +0.6%.
The momentum is expected to accelerate dramatically in fiscal year 2025, which coincides with the hosting of the World Expo. APIR forecasts an impressive +1.8% growth for Kansai, more than the +1.2% predicted for the entire country. This period of heightened economic activity is expected to continue into 2026 with a solid +1.1% growth, indicating sustained vitality even after the Expo concludes.
The Driving Forces: Expo 2025 and the Inbound Tourism Surge
Two major factors are fueling this optimistic forecast for Kansai.
The Expo 2025 Effect
Expo 2025 Osaka, Kansai is already acting as a powerful economic catalyst. The massive construction projects for the event site and related infrastructure are boosting investment. As the opening date approaches, the Expo is expected to draw millions of visitors from both Japan and abroad, leading to a massive increase in consumer spending on accommodation, dining, transportation, and entertainment. This influx of activity is the primary driver behind the exceptional growth predicted for 2025.
A Tourism Boom Amplified by the Weak Yen
The other key factor is the remarkable recovery of inbound tourism. Bolstered by a historically weak yen, which makes Japan an incredibly affordable destination for international travelers, visitor numbers to Kansai have already surpassed pre-pandemic levels. The region, with its world-class attractions in Osaka, Kyoto, and Nara, is a prime beneficiary of this trend, experiencing a surge in spending from tourists enjoying favorable exchange rates.
What This Economic Forecast Means for Travelers
This bright economic outlook has direct implications for anyone planning a trip to Osaka and the surrounding Kansai region.
A Constantly Evolving Destination
The economic boom means the region is buzzing with development. Travelers can expect to see new hotels, innovative restaurants, and enhanced attractions opening in the lead-up to and during the Expo. The city of Osaka is investing heavily in its infrastructure, promising an even more welcoming and exciting experience for visitors.
Planning Ahead is Key
The forecast also comes with a word of caution for travelers: increased demand. The combination of the Expo and the general tourism boom will likely lead to challenges like hotel room shortages, crowded public transport, and higher prices, a phenomenon sometimes referred to as “overtourism.” To make the most of your trip, booking flights and accommodation well in advance is highly recommended. Exploring travel options during off-peak seasons or weekdays could also lead to a more comfortable experience.
Your Money Goes Further
The persistent weakness of the Japanese yen remains a significant advantage for international visitors. Your home currency will likely stretch further here, allowing for more opportunities to indulge in world-class cuisine, unique shopping, and unforgettable cultural experiences. This favorable exchange rate makes Kansai a top value-for-money destination right now.
Looking ahead, Kansai is positioning itself not just for the short-term boom of the Expo, but for sustained growth as a global center for tourism and business. For travelers, this means the region is more vibrant and full of opportunity than ever before. While a little extra planning will be necessary, the rewards of visiting during this exciting period of transformation are undeniable.
