Japan’s economy showed scant signs of a clear recovery with its narrower-than-first-estimated contraction leaving plenty of reason for continued caution among policymakers as the Bank of Japan eyes the timing of its next interest rate hike.

Gross domestic product (GDP) shrank at an annualized pace of 1.8% in the three months through March, the Cabinet Office said Monday, compared with a 2% retreat reported in preliminary data. Economists had forecast the updated figures would be unchanged.

The data showed both consumers and companies cutting back on spending and unsold supplies building up on warehouse shelves as the strongest inflation trend in decades continues to crimp outlays in real terms.