Japan's $309B natural disaster costliest ever
The costs of reconstruction after this month's earthquake and tsunami are expected to be more than $309 billion US, the Japanese government said Wednesday.
That would make it the most expensive natural disaster in history, easily surpassing Hurricane Katrina, which struck New Orleans in 2005. The Insurance Information Institute calculated that cost at $125 billion.
The Japanese Cabinet Office estimated direct losses of between $198 billion and $309 billion in damage to housing, roads, utilities and businesses across seven prefectures.
The latest projection is considerably higher than others. The World Bank on Monday said damage might reach $235 billion. Investment bank Goldman Sachs had estimated it at as much as $200 billion.
Japan's estimate does not include the impact of power shortages triggered by damage to a nuclear power plant or how radiation will affect food and water supplies, so the overall economic impact could be even higher.
It also leaves out potential global repercussions.
On Tuesday, Japanese manufacturing giants such as Toyota, Honda and Sony announced extended shutdowns to production at some plants.
"The aftermath of the tragic events in Japan will obviously alter the domestic economy," Takuji Aida, an economist at UBS Securities Japan, said in a report.
"However, Japan's position in the global economy is such that there must also be some transmission of the shock to other parts of the world."
The Cabinet Office suggested the economic hit could be softened by the expected upswing in public works and construction as the region rebuilds.
Utilities have imposed power rationing, many factories remain closed and key rail lines are impassable.
The government plans to introduce a supplementary budget to tackle reconstruction, though cabinet members have said additional budgets will probably be needed down the road.
The government also reportedly plans to inject public money into banks to help support lending as companies rebuild.
It may finance that from a fund of $135 billion that is still available under a law on emergency support to banks passed after the 2008 collapse of Lehman Brothers.
With files from The Associated Press