Japan quake economic impact to be 'short-term'

Monday, March 21, 2011

Beijing - The massive earthquake and tsunami that hit Japan over a week ago will affect the global economy, but its impact will be short-lived, World Bank Chief Economist and Senior Vice President, Justin Yifu Lin, said on Monday.

"It is a little bit too early to give an accurate estimate to the economic loss of the earthquake and ensuing tsunami," he said, adding that the loss could be between 2.5 to 4 percent of Japan's GDP, or $120 to $230 billion.

In short term, the loss could be great.

"The international financial market is sensitive to disasters. Appreciation of the yen and the drop of foreign trade in Japan would also affect the economy of some other countries," he told Xinhua in Beijing.

Northeastern Japan, which was severely struck by the quake, is a major base for auto production and many of Japan's auto manufacturers shut down after the earthquake. Steel plants had also been affected, according to earlier reports.

However, Lin noted that post-quake reconstruction efforts would give a boost to Japan's economy, and it would soon recover.

"After a year, Japan's imports will return to the level as before the quake, while its exports will rebound to 80 percent," Lin said. 

Meanwhile, an earthquake measuring 5.8 on the Richter scale jolted Hindu Kush region in Afghanistan at on Monday, the US Geological Survey said.

The epicenter, with a depth of 196.70 km, was initially determined to be at 36.5189 degrees north latitude and 70.9204 degrees east longitude. 

An earthquake of the same magnitude rocked the Philippine capital of Manila today, the Philippine Institute of Volcanology (Phivolcs) and Seismology said.

Phivolcs Director Renato Solidum said the earthquake occurred at 6.37pm local time and the epicenter was near Lubang Island in the northern Philippine province of Mindoro, according to television reports.

No casualties have been reported.