TOKYO (Reuters) – Japan’s factory output rose in February at a slower pace than the previous month, adding to growing signs that the rapidly spreading coronavirus pandemic is taking a toll on an economy already on the cusp of recession.

The data underscores the challenge Prime Minister Shinzo Abe faces in preventing the virus outbreak from wiping out the benefits his “Abenomics” stimulus policies have brought to the economy.

Factory output rose 0.4% in February, government data showed on Tuesday, slower than the 1.0% gain in January but faster than the 0.1% increase forecast in a Reuters poll.

Manufacturers surveyed by the government expect output to fall 5.3% in March and increase 7.5% in April, the data showed.

Separate data showed retail sales rose 1.7% in February from a year earlier. The jobs-to-applicants ratio fell to 1.45 in February from 1.49 in January, labor ministry data showed, marking the lowest level in nearly three years.

The new virus has infected more than 700,000 people and killed about 35,000 around the world, while disrupting global trade, tourism and supply chains and prompting city lockdowns.

In Japan, a rise in domestic coronavirus cases has stoked worries of tougher social distancing restrictions, while a decision to postpone the Tokyo Olympics Games threatens to push the fragile economy into recession.

Abe has pledged a huge stimulus package that would be bigger than one launched during the global financial crisis to cushion the outbreak’s hit to growth.

Japanese automakers like Toyota Motor have announced factory shutdowns across the globe, including at domestic plants, due to slumping demand and supply chain disruptions.

The world’s third-largest economy shrank an annualized 7.1% in the three months through December due to the hit from last year’s sales tax hike and the U.S.-China trade war.

Analysts expect the economy to contract again in the first quarter, meeting the technical definition of a recession.

Japan’s government last week offered its bleakest assessment on the economy in nearly seven years, saying conditions in March were “severe” as the coronavirus pandemic shut down factories and cooled consumption.

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