Japan quake damage to cost up to $309b

FE Team | Published: March 24, 2011 00:00:00 | Updated: February 01, 2018 00:00:00

OSAKA, Mar 23 (AFP): Japan on Wednesday said the cost of the March 11 earthquake and tsunami could hit 25 trillion yen ($309 billion), double the Kobe quake and nearly four times more than Hurricane Katrina. The total cost from collapse or damage to houses, factories and infrastructure such as roads and bridges was estimated at 16 to 25 trillion yen over the next three fiscal years, the Cabinet Office said. The estimate does not account for wider issues such as how radiation from the stricken Fukushima nuclear plant crippled by the quake will affect food and water supply, amid a deepening food scare. Even so, with the cost of the destruction set to push down growth in the coming fiscal year, the upper estimate would put the disaster's monetary impact at more than double the 9.6 trillion yen of the 1995 Kobe earthquake. Japan's estimate covers seven prefectures including the hardest-hit areas of Iwate, Miyagi, and Fukushima, as well as Hokkaido, Aomori, Ibaraki, and Chiba. The three hardest-hit account for up to 23 trillion of the total. The damage could hit Japan's growth by as much as 0.5 per cent, although economists expect Japan's biggest reconstruction effort since World War II to give the economy a lift in the second half. Analysts including those from Credit Agricole and Capital Economics have slashed growth forecasts for Japan to near zero for the 2011 financial year as the scale of destruction continues to emerge. Japan has said it is mulling the idea of establishing a reconstruction agency to oversee the rebuilding effort. The Bank of Japan has pumped in record funds, around 40 trillion yen, to stabilise financial markets. Hundreds of thousands have been made homeless by the 9.0-magnitude quake and the devastating tsunami it unleashed, which erased whole towns. The confirmed death toll from the disaster rose Wednesday to 9,408, and Japan holds little hope for 14,716 officially listed as missing. Yosano warned that production has stagnated after the quake with plants forced to idle due to power shortages. The disaster shattered transport systems in the northeast and has meant production shutdowns at Japan's top companies such as Toyota due to damaged facilities, rolling power outages and broken supply chains crucial to making cars, electronic gadgets and machinery. Japan grew 3.9 per cent in 2010, but ceded its spot as the world's second-biggest economy to China. It contracted in the fourth quarter. Analysts had expected the economy to rebound in January-March with a global recovery lifting Japan, amid a recent pick-up in output and exports, but the quake-enforced production shutdowns have thrown that into doubt. Agencies further adds: Japanese banks are in talks to give Tokyo Electric Power (Tepco) emergency loans to help repair its damaged and leaking nuclear power plant. Sumitomo Mitsui Financial Group, Mitsubishi UFJ and Mizuho are considering providing up to 2tn yen ($24.7bn; £15.1bn). Tepco may get the loans by the end of this month. Another AFP report from Manila adds: Supermarkets across Asia are selling fewer Japanese products and restaurants in "Little Tokyo" districts are suffering as fears rise that Japan's food chain is being dangerously tainted with radiation. Hong Kong became the first place in Asia to impose a ban on certain Japanese food imports after the United States said it was barring dairy products and fresh produce from regions around a stricken nuclear plant northeast of Tokyo. South Korea said it was considering doing the same while a host of other Asian nations have been testing Japanese food imports since radiation started leaking from the Fukushima No. 1 plant, which was crippled by a devastating earthquake and tsunami nearly two weeks ago.