TOKYO (Reuters – Japan’s household spending in September likely declined as Japanese consumers remained concerned about COVID-19 limitations, a Reuters poll revealed on Friday. This heightened economic risks and further weakened the chances of a recovery.

Domestic demand will rebound after the government ended the state of emergency at the end of September. However, external factors such as supply shortages and soaring commodity prices have hampered Japan’s recovery from the pandemic.

The median forecast from Reuters Poll of 16 economists shows that household spending will have declined 3.9% by September compared to a year prior. This is after a 3.0% drop in August.

Japan Research Institute economists stated that although traffic has slightly increased due to the progress in vaccination and the abating of COVID-19, consumers remain cautious.

Monthly data from the government due at 8:30 am on November 5 (Nov. 4 2330 GMT) is expected to show that September spending was 2.8% higher than in September, marking the first upward trend after four consecutive months of decline.

As the COVID-19 curbs are lifted, analysts expect households to spend more after October. This will lead to an increase in foot traffic at malls and restaurants.

A Reuters poll from earlier in the month predicted that the third largest economy on earth would stagnate between July and September due to pressures coming from many directions. While exporters suffered from chip shortages, disruptions in parts supplies to Asian countries, and high energy costs inflation, private consumption was not affected.

November 15th will see the release of a preliminary estimate by government for third-quarter gross national product.