Bill for costliest disaster in history estimated at €120bn
Published 15/03/2011 | 05:00
THE tsunami is expected to be the world's most expensive natural disaster, with predictions that the repair bill will top €120bn.
Hurricane Katrina holds the record, having caused €89bn worth of damage to the Gulf Coast of America in 2005.
But City of London firm Credit Suisse predicted yesterday that the total cost of Friday's earthquake and tsunami would be at least 14 trillion yen (€122bn).
The disaster caused a 6.2pc drop in Japan's Nikkei share index, wiping €104bn off stocks and shares traded there. That, in turn, dragged share prices to a six-week low in many countries.
In Britain, the FTSE 100 index closed 0.9pc or £13.5bn (€15.6bn) down, while the Dow Jones suffered a similar slump in early trading.
Andre Bakhos, director of market analytics at Lek Securities in New York, said: "The earthquake could have great implications on the global economic front. If you shut down Japan, there could be a global recession."
Other experts suggested that the tragedy would at least hinder worldwide recovery from the economic downturn.
The Bank of Japan responded to the disaster by pumping a record €130bn into the banking system to prop up confidence and meet demand for borrowing, in the aftermath of the disaster.
Japan was already struggling, with its national debt standing at twice national income and its economy shrinking in the last three months of 2010.
Dozens of factories were unable to open yesterday and many companies could not predict how long it would take to repair damage and restore supply lines.
Among the major concerns that could not operate factories were Toyota, Honda, Nissan, Canon, Nestle, Sony and Panasonic. (© Daily Telegraph, London)