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Japan firms see economy recovering to pre-COVID level in FY2022 By Reuters

© Reuters. FILE PHOTO: A businessman stands on a terrace overlooking a banking district in Tokyo, Japan, February 16, 2016. REUTERS/Thomas PeterBy Tetsushi KajimotoTOKYO (Reuters) – A majority of Japanese firms say the world’s third-largest economy will recover to pre-pandemic levels in fiscal 2022, a Reuters poll showed, with many anticipating they will continue to…

Japan firms see economy recovering to pre-COVID level in FY2022© Reuters. FILE PHOTO: A businessman stands on a terrace overlooking a banking district in Tokyo, Japan, February 16, 2016. REUTERS/Thomas Peter

By Tetsushi Kajimoto

TOKYO (Reuters) – A majority of Japanese firms say the world’s third-largest economy will recover to pre-pandemic levels in fiscal 2022, a Reuters poll showed, with many anticipating they will continue to face COVID pains until next year or later.

The Corporate Survey results underscored a cautious view of Japan Inc on the economy, which stood in contrast with the government’s optimistic estimate that gross domestic product (GDP) will return to pre-COVID levels later this year.

Revised government data last week showed Japan’s economy grew 1.9% in April-June, backed by solid capital spending, but economists say a resurgence in the pandemic will put a drag on the pace of recovery in the coming quarters.

“There will be a repeat of the vicious circle of variants and resurgence,” a manager of a ceramics maker wrote in the survey on condition of anonymity. “It will take time to contain the pandemic thoroughly.”

The manager added that the economy will return to pre-COVID levels in fiscal 2024.

The Corporate Survey found a slim majority said the economy will return to pre-pandemic levels in fiscal 2022, followed by one third of respondents who anticipated a recovery to such levels in fiscal 2023.

About 16% saw the economy’s return to pre-pandemic levels to happen in 2024 or later.

The Sept. 1-10 poll canvassed 500 large and midsize non-financial Japanese corporations, conducted for Reuters by Research. About 260 companies responded to the survey.

In the survey, three-quarters of Japanese firms said they were negatively hit by the pandemic while 11% were affected positively. Nearly 60% said negative impacts will disappear in fiscal 2022. About 21% said such effects will fade away this fiscal year and the rest saw it disappearing after fiscal 2022.

Further clouding the outlook, half of Japanese firm

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