Japan maintained fortress-like lockdowns in response to the COVID-19 pandemic, shut off from much of the world.

The drop in international visitors to the country amid tight travel restrictions was substantial.

In 2019, before the pandemic shutdowns, Japan received a record 31 million visitors. The following year, amid the 2020 Tokyo Olympic Games, the country aimed for 40 million visitors. Following the Japanese government’s COVID measures, numbers barely exceeded 3 million.

The tourism sector would plummet further in 2021, when less than a quarter-million foreigners arrived in the country the entire year, according to the South China Morning Post.

Now, Japan has largely abandoned its strict border controls and begun to allow visitors back in large numbers. For the first time in years, tourist hotspots and restaurants are overwhelmed.

Though the recent activity has been encouraging, recovery has been gradual. Japan’s economy grew at an annualized rate of 0.6% during the final quarter of 2022, below market estimates of up to 2%.

The fourth quarter also followed an unexpected contraction in Q3, driven by high import prices that quelled consumer spending.

Still, 2022 finished in the green, with the economy growing 1.1% after accounting for inflation. This marked the second consecutive year of growth following the 2.1% rise witnessed in 2021.

Japan’s economy, while now recovered to levels seen preceding the pandemic, has trailed the growth of its peers.

Q4 saw some recovery in domestic consumption in a country where consumers have typically been wary of COVID risks, suppressing an appetite to visit restaurants and shopping malls. Now it seems government subsidies are helping drive an increase in travel and eating out.

Open borders and a soft yen have also enticed travelers from abroad in search of a deal. Saisuke Sakai, the senior economist at Mizuho Research and Technologies, said people are engaging in “revenge spending” after “waiting out the coronavirus,” according to The New York Times.

The weak yen also means the country, heavily dependent on imported food and energy, is seeing prices surge. December’s inflation clocked in at 4%, modest by some country’s standards but a four-decade high for Japan. Coupled with the country’s stagnant wage growth, people are paying a greater share of their salary to keep up.

Shinichiro Kobayashi, the principal economist at Mitsubishi UFJ Research and Consulting, is hopeful about the near future. He believes a surge in Chinese tourists could help buoy the country’s economy, reported The New York Times.

Though concerns remain about the fallout from a looming recession in the United States and Europe, Kobayashi anticipates “modest growth” to persist in the short term.

Takahide Kiuchi, the executive economist at the Nomura Research Institute, said that while many of his colleagues expect Japan’s growth to surpass Europe and the U.S. this year, he is not so sure.

Referring to the volatile global market, Kiuchi told The New York Times, “External factors may undermine the growth momentum of the Japanese economy.”

“I personally expect that the Japanese economy may fall into a mild recession in the middle of this year,” he said.