Japan quake could cost economy 25 tril. yen: gov't+

TOKYO, March 23 Kyodo -
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.
''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.
The estimate by the Cabinet Office covered Iwate, Miyagi, Fukushima, Hokkaido, Aomori, Ibaraki and Chiba prefectures. The figure of the possible cost compared with some 9.6 trillion yen predicted after the 1995 Great Hanshin Earthquake that pummeled Kobe and its environs, with Yosano saying ''The scale of damage is much bigger than in the Hanshin quake.''
In a separately released report, the government maintained its basic economic assessment for the country as a whole, while expressing its concerns about the negative consequences of the earthquake.
''Although the Japanese economy is turning toward picking up, it is only weakly self-sustaining and the influence of the Tohoku-Pacific Ocean Earthquake'' is a concern, the monthly report said.
''We must keep in mind that because of the earthquake, production could slow down over an extensive area and for a lengthy period,'' Yosano said.
==Kyodo