Singapore (AFP) March 21, 2011
The massive quake and tsunami of March 11 could cost Japan's economy up to $235 billion, or 4.0 percent of output, but reconstruction will spur recovery later this year, the World Bank said Monday.
"If history is any guide, real GDP growth will be negatively affected through mid-2011," the World Bank said in its latest East Asia and Pacific Economic Update report.
But growth should pick up in subsequent quarters "as reconstruction efforts, which could last five years, accelerate," it added.
The lower end of the World Bank's estimate of the twin disasters' impact was $122 billion, equivalent to 2.5 percent of gross domestic product.
Vikram Nehru, the World Bank's chief regional economist, said the disasters would also affect the rest of Asia, but said it was too early to give estimates of the cost to the region.
"In the immediate future, the biggest impact will be in terms of trade and finance," he said.
The World Bank noted that after the 1995 Kobe earthquake, Japan's trade slowed only for a few quarters, with imports recovering fully within a year and exports rebounding to 85 percent of pre-quake levels in the same period.
"But this time around, disruption to production networks, especially in automotive and electronics industries, could continue to pose problems (beyond one year)," the statement added.
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