Japan likely to suffer sharper economic downturn than expected: Reuters poll

After extending the state of emergency in the country to curb the spread of the coronavirus, Japan is seen to fall under a shaper economic downturn, a Reuters poll suggested.

According to analysts, the staging of the Olympic Games in Japan would have little effect on its ailing economy due to construction spending and limited spectators.  The poll yielded an annualized 5.0% fall in the first quarter, doubling the previous 2.4% estimate projected last month.

Moreover, economic analysts who participated in the poll suggest that the Japanese economy, the world’s third-largest, will contract 5.3% in the current fiscal year ending in March before growing 3.6% the following year.

Excluding volatile fresh food prices, core consumer prices are also likely to decline 0.5% this fiscal year and expand 0.2% in the next fiscal year, the poll added. These projections were the same as the previous estimates.

Majority of the respondents in the poll said the Bank of Japan will ease monetary policy, albeit some think the central bank will not do so until 2023.