Earthquake News

The earthquake and tsunami in Japan are expected to be the world's most expensive natural disaster, costing up to $309 billion.

If the government's projections are true, the losses will surpass those caused by Hurricane Katrina. According to the Insurance Information Institute, the 2005 megastorm that wrecked New Orleans and the surrounding region cost $125 billion.

The impact of power shortages caused by nuclear power plant damage is not included in Japan's assessment, thus the overall economic impact might be substantially worse. It also ignores the possibility of global ramifications.

In a study, Takuji Aida, an economist at UBS Securities Japan, stated, "The repercussions of the sad events in Japan will undoubtedly change the local economy." "However, Japan's position in the global economy dictates that some of the shock must be transmitted to other regions of the globe."

However, the Cabinet Office noted that the economic blow might be mitigated by a projected increase in public works and building as the region rebuilds.

On March 11, a 9.0-magnitude earthquake and tsunami wreaked havoc on Japan's northeastern shore, killing thousands of people and sparking a nuclear power plant meltdown. Thousands of people living in the vicinity of the facility were evacuated.

Power rationing has been implemented, many factories are still shuttered, and vital rail routes are closed.

Toyota Motor Corp., the world's largest carmaker, has been unable to get key components, including rubber parts and electronics, since March 14. Its lost output will hit 140,000 automobiles by Sunday.

Due to a shortage of parts, Toyota said on Wednesday that it will delay the introduction of its Prius hybrid minivan in Japan.

According to Toyota spokesman Paul Nolasco, the Prius minivan was supposed to be released in April. However, the accident has left suppliers crippled and stores devastated, forcing Toyota to postpone the launch.

Another economic assessment issued by the Cabinet Office on Wednesday highlighted the fresh problems confronting Japan, which had been recovering from a halt in growth late last year.

"The economy is improving, but its self-sustainability remains a concern," it stated.

In general, the Japanese economy has been sluggish over the past two decades, just managing to maintain sluggish growth in between slowdowns. Last year, it lost its place as the world's second largest economy to China, and it is burdened with the world's largest public debt, at 200 percent of GDP.

The administration intends to create a supplementary budget to address rebuilding, while Cabinet members have predicted that further budgets would be required in the future.

According to the Kyodo news agency, Finance Minister Yoshihiko Noda stated Tuesday that the country's poor public finances will not dissuade the government from investing in reconstruction.

Noriyuki Shikata, a spokesperson for the Cabinet Office, expressed confidence that the country will be able to face the tremendous work ahead.

He told reporters on Wednesday, "This is not anything the Japanese economy can't overcome."

According to reports, the government intends to put public funds into banks to assist lending while businesses recover. It may be able to do so using funds worth 11 trillion yen ($135 billion) set aside under a statute on bank emergency support implemented following the collapse of Lehman Brothers in 2008.

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