March 21st, 2011
03:03 AM GMT
(CNN) – The total cost of the quake and tsunami on the Japanese economy could hit $235 billion and take five years for the nation to rebuild, according to a World Bank report released Monday.
“If history is any guide, real gross domestic product growth will be negatively affected through mid-2011,” the report said. “Growth should though pick up in subsequent quarters as reconstruction efforts, which could last five years, accelerate.
“While it is too early to estimate accurately, the cost of the damage is likely to be greater than the damage caused by the 6.9 magnitude Kobe earthquake in 1995,” the report added.
The report projects that cost estimates could range between $122 billion to $235 billion, or between 2.5% and 4% of GDP, citing government and private estimates. The Kobe earthquake, which killed nearly 6500 people, cost around $100 billion.
The impact on trade in East Asia, however, should be temporary, with a short-term affect on trade – especially automobiles and electronics – and finance. “After the Kobe earthquake, Japan’s trade slowed only for a few quarters before recovering,” the report said. “Within a year, imports had recovered fully and exports had rebounded to 85 percent of pre-quake levels.”
The human cost, however, is still being assessed: As of Sunday night, Japan's National Police Agency said that 8,277 people were confirmed dead and 12,722 had been reported missing.
“The tragic earthquake on March 11 in Japan with a magnitude 9 on the Richter scale—the most powerful in the country’s recorded history and fourth most severe in the world—and the subsequent tsunami are a stark reminder of the unpredictable dangers posed by natural hazards,” the report said. “The loss of life has been heartbreaking … (but) the Japanese people have shown strength and resilience as they struggle to deal with this crisis.”
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.