TOKYO (Reuters – Japan’s economic strength in the fourth quarter of 2021 is being downgraded. However, rising energy costs and pressures such as record COVID-19 infected are raising concerns about a quarter’s contraction.

For policymakers responsible for helping the country recover from its fragile state, the downwardly revised growth means bad news. A rise in commodity prices as a result of the Ukraine crisis and ongoing supply disruptions increase economic uncertainty.

The Cabinet Office released revised gross domestic product data (GDP), Wednesday showing that Japan experienced an increase of 4.6% annually in October and December. It was below the economists’ median estimate of a 5.6% rise and the preliminary reading at 5.4%, which were released last month.

Quarter-on-quarter, GDP grew 1.1%, which was below the median market expectation of a gain of 1.4%.

The increase in private consumption which accounts for more than half of Japan’s GDP was 2.4% over the quarter before. This is a revision to the initial 2.7% gain.

While domestic demand in its entirety contributed 0.9 percent to revisions in GDP, net exports increased 0.2 percent.

A Reuters poll showed that economists forecast 0.4% annual growth in the January-March quarter. This is a significant decrease from their earlier projections due to Omicron coronavirus variant infection and uncertainty caused by war in Ukraine.