TOKYO : Japan's economy will grow at a slower pace than previously thought next quarter in part due to Russia's invasion of Ukraine and its inflationary effect on global commodity and energy prices, a Reuters poll of economists showed on Thursday.
Since the start of Russia's war in Ukraine on Feb. 24, the economic outlook has become even more difficult to forecast as consumer price rises and supply bottlenecks threaten a solid recovery in domestic demand. While consumer activity is usually robust in the second quarter, higher prices are now hurting consumers' purchasing power, restraining the release of pent-up demand after COVID-19 curbs ended, said Hiroshi Namioka, chief strategist and fund manager at T&D Asset Management.
Earlier this month the government lifted remaining coronavirus curbs across Japan after Omicron infections subsided following an earlier record surge. Six chose a range of 125-130 yen to the dollar, while one picked 120-125, three opted for 115-120 and another one chose stronger than 110 yen per dollar.