TOKYO- Japan’s economy likely grew and avoided slipping into recession this quarter but an extension of emergency measures to stem a rise in coronavirus infections has dented the growth outlook, a Reuters poll showed.
Just over a month before Tokyo is set to host the Olympic Games, the world’s third-largest economy was seen expanding an annualized 0.5 percent this quarter, less than a third of the 1.7 percent economists projected last month, according to the June 2-14 poll of 36 economists.
Japan’s gross domestic product shrank by an annualized 3.9 percent in January-March, the first contraction in three quarters.
About 85 percent of analysts polled expected the next policy move by the Bank of Japan, which is set to meet this week, to be an unwinding of stimulus, but 90 percent don’t expect that to happen until 2023 or later and the remaining 10 percent not until next year.
About two-thirds of economists, 23 of 36, expected the economy to grow this quarter, while the other 13 anticipated it would shrink, which would push it into recession – as marked by two straight quarters of contraction.
Japan was last in recession through the second quarter last year.
“Sales at stores are likely to fall, which is having the largest impact, even as the share of people … going out despite the emergency measures is rising,” said Masaaki Kanno, chief economist at Sony Financial Holdings.
The poll found Japan’s economy would grow at a much slower rate over the next two quarters than the United States, which is said to be on track to recover all the output it lost due to the health crisis this quarter.
