“Damage to housing and infrastructure has been unprecedented,” the World Bank declared. “Growth should pick up though in subsequent quarters as reconstruction efforts, which could last five years, accelerate.”
The bank also said the Japanese government will spend $12 billion on reconstruction in the current national budget and much more in the next one, the Associated Press reported on Monday.
Following the disaster in the Asian nation, private insurers are reportedly facing between $14-33 billion worth of claims.
“Japan is a major producer of parts, components and capital goods which supply East Asia’s production chains,” the bank added.
The March 11 disaster — which has reportedly claimed more than 20,000 lives — will possibly result in a 0.5 percentage decline in the country’s economic growth this year.
The 9.0-magnitude earthquake was followed by a gigantic tsunami that disabled the generators supplying power to cooling systems of Fukushima Daiichi nuclear plants, causing reactor explosions that resulted in hazardous radiation.
Ports, steel mills, oil refineries, nuclear power plants and manufacturers of auto and electronics components are mainly located in the northeastern part of the country — the epicenter of the catastrophe.