By Leika Kihara

TOKYO (Reuters). Japan’s March wholesale inflation remained close to record highs as the Ukraine crisis, weak yen and higher fuel costs pushed up raw materials and fuel prices, data shows on Tuesday. These factors are adding pressures on a resource-poor country heavily dependent upon imports.

Although rising wholesale prices may help to accelerate inflation towards central bank’s goal of 2%, they could be detrimental for an economy still suffering from the coronavirus outbreak, analysts warn.

According to data, the corporate goods prices index (CGPI), which shows how companies price their goods, increased by 9.5% in March compared with a previous year.

This was following a revision 9.7% increase in February. It was also faster than the median market prediction of a 9.3% rise. The Bank of Japan (BOJ), reported that the March index reached 112.0. It was at its highest since December 1982.

Companies won’t make any money without raising prices, as raw material costs are on the rise. Takeshi Minami is the chief economist of Norinchukin Research Institute.

He said that core consumer inflation could accelerate to 2.5% by the end of this year, and remain above 2% longer than originally expected. This will have a negative impact on consumption.

The data revealed that March’s yen-based import prices index rose 33.4% compared to a previous year. It is an indication of how the Japanese economy has been declining in recent years, and inflating import costs.

Japanese households have had difficulty paying rising household costs as soft wage growth and consumption has kept inflation at a low level.

Core consumer inflation is expected to rise around 2% by April because of rising fuel prices and the dissipating impact of past phone fee cuts.

Inflationary pressure is increasing, which means that there’s a greater chance for the BOJ to revise its inflation forecast during its April 28 quarterly review. Core consumer inflation is expected to reach 1.1% this year, according to the bank’s forecast. This prediction was made in April.