Analysts reassess Japan's economic prospects

Analysts are warning it could take longer than expected for Japan's economy to rebound from the impact of COVID-19. That's after disappointing GDP numbers released Monday.

The Cabinet Office data showed the economy shrinking an annualized 3 percent from July to September. The average forecast by economists was just 0.56 percent.

The government is still projecting that GDP will rebound to pre-pandemic levels by the end of the year.

But Kobayashi Shinichiro, chief economist at Mitsubishi UFJ Research and Consulting, says that would require growth of more than an annualized 9.5 percent in the current quarter.

Kobayashi says "with the latest contraction bigger than expected, the government's goal has become more difficult to achieve."

He says his firm now believes the recovery to a pre-pandemic level will be delayed until the April-June quarter next year.

Crude oil prices and supply issues are likely to constrain growth in the short-term and provide a challenge for new Prime Minister Kishida Fumio as he prepares his economic blueprint.