Japan second quarter economic growth forecasts cut sharply on coronavirus restrictions


By Daniel Leussink

TOKYO (Reuters) – Japan’s economy is set to grow much slower than previously hoped this quarter, hobbled by extended emergency measures put in place to halt a rise in coronavirus infections, a Reuters poll showed.

It is likely to expand an annualised 1.7% this quarter, less than half the 4.7% projected last month, according to the poll of 33 economists conducted May 6-13.

Nearly all of the economists polled believe the government will compile an extra budget to support the world’s third-largest economy, with 60% expecting it to come before the end of the third quarter.

A surge in infections due in part to new variants led to the government’s decision to extend a state of emergency in Tokyo and three other areas until the end of the month and to expand it to two more prefectures, hitting consumer spending and broader activity.

“The pace of recovery appears to have been sluggish since the start of the year,” said Yusuke Shimoda, senior…

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