Global Reaction

Economic impact of Japan quake 'short-term':WB

(Xinhua)
Updated: 2011-03-21 17:22

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.

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"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 (Gross Domestic Product), 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.