TOKYO, May 11 Reuters Japan39;s economy likely contracted in the first three months of this year as the lingering fallout from the COVID19 pandemic took a toll on consumption and exports, a Reuters poll showed.

The weak reading will underscore the challenge policymakers face in pulling the world39;s thirdlargest economy sustainably out of the pandemicinduced doldrums.

While the economy is likely to rebound in the current quarter, the outlook remains clouded by Russia39;s invasion of Ukraine that has led to a surge in commodity and fuel costs.

Gross domestic product GDP likely shrank an annualised 1.8 in the JanuaryMarch period after a 4.6 expansion in the previous quarter, according to analysts polled by Reuters. That would translate into a quarterly 0.4 contraction.

A big drop in consumption was mainly behind the contraction in JanuaryMarch GDP, due largely to the outbreak of the Omicron variant, said Saisuke Sakai, senior economist at Mizuho Research and Technologies.

The recovery will remain moderate due to Japan39;s worsening terms of trade blamed on the Ukraine crisis and slowing global growth, he said.

Private consumption, which accounts for more than half of GDP, likely fell 0.5, largely because of the Omicron outbreak that forced the government to impose curbs on activity.

External demand, or exports minus imports, likely knocked 0.3 percentage point off GDP growth, reflecting weak exports.

Capital spending is expected to have risen 0.7 after a 0.3…