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.

Japan Inc had a more cautious approach to Japan Inc’s economic outlook, which was contrary to its optimistic assessment that GDP (gross domestic product) would return to pre-COVID levels in the latter part of the year.

The economy of Japan grew by 1.9% last week, thanks to solid capital spending. But economists believe that the rate of recovery will be slowed down by a return to the pandemic.

A manager at a ceramics manufacturer wrote that there would be another round of variations and resurgence. He did so under anonymity. It will be difficult to stop the spread of the pandemic.

Manager added that fiscal 2024 will see the economy return to pre-COVID level.

According to the Corporate Survey, a small majority of respondents predicted that the economy would return to pre-pandemic levels by fiscal 2022. One third also anticipated such a recovery in fiscal 2023.

Around 16% predicted that the economy would return to prepandemic levels in 2024.

The Sept. 1-10 poll canvassed 500 large and midsize non-financial Japanese corporations, conducted for Reuters by Research. The survey was completed by approximately 260 businesses.

The survey revealed that three quarters of Japanese companies felt negatively affected by the pandemic, while only 11% said the opposite. A majority of respondents predicted that the negative effects would disappear by fiscal 2022. Nearly 21% believed such impacts would fade this fiscal year, and the rest predicted that it would disappear after fiscal 222.

A quarter of Japanese businesses said that they are being adversely affected by a global chips shortage. This was confirmed by six of the 10 Japanese firms.

Around 20% stated that the global chip shortage had caused or would cause a downward revision in their production and sales plans for fiscal 2021.

A manager at a machine maker wrote that “spreading infected and lockdown in Southeast Asia has cut supply-chains of parts.” Manager of a transport equipment manufacturer wrote that chip shortages were caused by lockdown in Malaysia.

Many firms responded that they would focus their attention on changing lifestyles and consumer behavior, as well as decarbonisation and digital transformation.