Effects on Japanese industrial market by Tohoku Earthquake

 Because of the effect of Tohoku Earthquakes on March 11, 2011, it is expected that economic activities will be limited and economic situation will be declined in the short term. However the size and range of damage by the earthquake was huge, it is expected the gradual economic growth from 2012 for several years. Followings are data which supports this.

 Japan experienced the burst of economic bubble in 1991 then run into low growth period. Direct damage by Great Hanshin Earthquakes in 1995 was approximately 124 billion dollar. And at that time, it was expected that this would effect on increase economic growth of around 2% because of restructuring mutilated stocks. As a consequence, it is pointed out that “the period when economy was comparably good after burst of economic bubble was for 2 years in 1995 and 1996” because of “having made unexpected  demands in Japanese economy” by the earthquake as mentioned in Economic White Paper in 1999.

 Japanese government estimates the direct damage by Tohoku Earthquakes was 200 billion dollar ~ 312 billion dollar. And when considering the damage by the accidents at nuclear power plants and radiation materials, the damage amount is expected to be bigger. Also effected amount of economic activities in 2011 was calculated as 15 billion dollar ~ 34 billion.

 World Bank announced Japan’s actual GDP growth of 2011 will be decelerated from primary forecast 1.8% increase to 0.1% decrease due to the influence of East Japan Big Earthquake. Growth of 4・・ period will be slowing down due to the infrastructure damage, closing of major factories, power-shortage, retrenchment in consumer spending. So the dropping margin of annualized growth rate will reach to 3%. But with the recovery of supply chain of parts , they forecast it will increase speed to 3・・% increase in second half year. However, by the decline of first half year, the growth will keep zero growing in full year.  After that, with the progress of recovery, they forecast it will become 2.6% increase in 2012, 2.0% increase in 2012.

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