Japan: earthquake damages to cost up to $309 billion

Japan: earthquake damages to cost up to $309 billion

2011-03-23 19:58:26 GMT+7 (ICT)

TOKYO (BNO NEWS) -- The government of Japan on Wednesday estimated that total damages caused by the catastrophic March 11 earthquake and ensuing tsunami could total up to 25 trillion yen ($309 billion).

However, the government - which also noted that in terms of costs, this could be the worst natural disaster in Japan since the end of World War II - ruled out any negative effects of power supply shortages caused by the nuclear crisis, as well as radiation damage to industries, Japan's Kyodo news agency reported. As a result, the final estimate could very well be worse.

According Japan's Cabinet Office, destruction of social infrastructure, housing and corporate facilities in the region could cost between 16 and 25 trillion yen ($198 and $309 billion), which could cause the nation's growth rate to drop by 0.5 percent.

Economic and fiscal policy minister Kaoru Yosano noted that the scale of the damages is much greater than 1995's Great Hanshin Earthquake, adding that one of the biggest difficulties to deal with could be the psychological effect on consumers regarding radiation concerns, as well as industry troubles due to the rolling blackouts implemented by Tokyo Electric Power Co., the operator of the Fukushima nuclear plant.

Nonetheless, officials noted that reconstruction efforts normally boost domestic demands, helping economic recovery as well.

The estimate by the Cabinet Office covered Iwate, Miyagi, Fukushima, Hokkaido, Aomori, Ibaraki and Chiba prefectures.

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