The government estimated Wednesday that the economic costs from the March 11 earthquake on seven affected prefectures could total up to 25 trillion yen ($309 billion), adding that this could be the worst natural disaster in Japan in terms of such costs since the end of World War II.
The destruction of social infrastructure, housing and corporate facilities in the areas could cost between 16 trillion yen and 25 trillion yen, according to the Cabinet Office. This could push the nation's economic growth rate lower by 0.5 percent.
The actual result may be worse, however, as this projection ruled out any negative effects of power supply shortages spawned by the nuclear plant crisis in Fukushima Prefecture, as well as of damage to industries caused by radiation fears.
But the office also suggested that downward pressure on the economy could be offset by reconstruction work, which normally brings about a surge in domestic demand.
''We provided the number based on data available so far, and cannot help having certain ranges in our estimate,'' economic and fiscal policy minister Kaoru Yosano told reporters.
''As there are some people who are concerned the Japanese economy could sink, I am saying the actual loss of GDP (gross domestic product) will be this size,'' Yosano said, apparently playing down such concerns.
We are now starting to get some numbers of the quake's economic impact to the country. The sad thing is that these numbers could get worse as better accounting takes place.''The most troublesome thing is harmful rumors and the psychological effect (on consumers) as a result of radiation concerns,'' he also said, while noting it is inevitable that manufacturers will suffer from rolling blackouts implemented by Tokyo Electric Power Co., the operator of the Fukushima nuclear plant.