The economic damage from Japan’s massive earthquake and tsunami last month is likely to be worse than first thought as power shortages curtail factory output and disrupt supply chains, the country’s economics minister warned on Tuesday.
“After a natural disaster, people tend to refrain from spending and you get a sense that factory output will shrink,” Economics Minister Kaoru Yosano told reporters after a cabinet meeting. “In some areas, the impact could be very big.”
Japan is facing its worst crisis since World War Two after a 9.0 magnitude earthquake and a tsunami towering more than 10 meters battered its northeast coast, leaving nearly 28,000 dead or missing and rocking the world’s third-largest economy.
The government estimates the material damage alone could top $300 billion, making it by far the world’s costliest natural disaster.
Finance Minister Yoshihiko Noda said on Tuesday that he would explain the Japanese government’s efforts on post-quake reconstruction and the nuclear crisis at a Group of 20 meeting in Washington on April 15.