That said, anecdotal information from firms suggests that vigilance against COVID-19 is sticky and thus people are reluctant to hold large year-end parties or go on a group trip. In some European countries, the number of confirmed cases has resurged despite progress with vaccinations,  3  and cases of the new Omicron variant, which is considered to be highly contagious, have been detected.
Given persistent risk aversion of households in Japan, mainly of seniors, the extent to which consumption will recover continues to warrant attention. The second factor is a risk that the effects of supply-side constraints will be amplified or prolonged (Chart 4). As mentioned earlier, the issue of parts shortages caused by the spread of COVID-19 in Southeast Asia has started to dissipate.