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Japan forecasts earthquake/tsunami to cost USD309bn

24-Mar-2011 11:17 AM

Japan's Government estimated damage from this month’s record earthquake and tsunami at as much as JPY25 trillion (USD309 billion), or four times the cost of Hurricane Katrina (Bloomberg, 23-Mar-2011). The cost will reduce GDP by as much as JPY2.75 trillion (USD34 billion) for the 12 months commencing 01-Apr-2011. The figure, around 0.5% of the JPY530 trillion economy, reflects a decline in production from supply disruptions and damage to corporate facilities without taking into account the effects of possible power outages. Bank of Japan board member Ryuzo Miyao separately commented that the "ability to depress economic activity from the supply side is larger than the Great Kobe earthquake and we must bear in mind that these effects could linger for some time. The short-term effects are not insignificant.”