© . A shopper looks at packages of vegetables at a market in a shopping district in Tokyo, Japan, Dec. 6, 2015. Photo taken Dec. 6, 2015. Matching JAPAN-ECONOMY/TANKAN REUTERS/Yuya Shino By Leika Kihara TOKYO () – It is Japan is unlikely to enter stagflation, a state in which rising inflation and declining economic growth coexist, a senior central bank official said Wednesday. With the crisis in Ukraine leading to sharp increases in energy and commodity prices, consumer inflation will “clearly accelerate” as companies pass the costs on to households, said Seiichi Shimizu, head of the Bank of Japan’s monetary affairs division. “But we do not expect Japan to face a stagflation-like situation, defined as a combination of rising inflation and contracting economic growth,” he told parliament. “We expect the Japanese economy to recover as the blow to service consumption from the coronavirus pandemic eases,” he said, adding support from solid external demand. The comments, which come at the BOJ’s policy meeting next week, suggest the central bank is sticking to its projection of a moderate economic recovery, but acknowledges mounting inflationary pressures from the recent surge in energy prices. Based on a January assessment, the BOJ currently predicts that consumer inflation is “accelerating” as companies “gradually” pass on rising commodity costs to households. While rising commodity and grain prices will drive up energy and food prices in the short term, it will hurt the economy in the long run through declines in household income and corporate profits, Shimizu said. Disclaimer: Fusion Media would like to remind you that the data on this website is not necessarily real-time or accurate. All CFDs (Stocks, Indices, Futures) and Forex prices are not provided by exchanges but rather by market makers, and therefore prices may not be accurate and may differ from the actual market price meaning prices are indicative and not suitable for trading purposes . Therefore, Fusion Media does not bear any responsibility for any trading losses that you may incur as a result of using this data. Fusion Media or anyone associated with Fusion Media accepts no liability for any loss or damage resulting from reliance on any information, including data, quotes, charts and buy/sell signals on this website. Be fully informed about the risks and costs associated with trading the financial markets, it is one of the riskiest forms of investment possible.