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Insured losses from Japan's earthquake could be as high as $35 billion, even without tsunami- and nuclear-related losses.
Mitsubishi UFJ's Brown says historical estimates of the Tokyo earthquake of 1923 put destruction as equivalent to 50 percent of annual economic output at the time, but the economic context was so different as to not make a direct comparison very fruitful,Canada Goose Jackets.
Fitch Ratings said in a statement it believes that while the earthquake will be among the largest insured losses in history, the losses can be absorbed by the insurance and reinsurance industries without widespread solvency problems or undue financial strain.
But some estimates of the reconstruction costs shoot far higher than these consensus forecasts as economists take into account the potential need to replace the country's devastated capital stock over a longer timeframe.
Vanessa Rossi, senior research fellow at London-based think-tank Chatham House, estimates that 10 percent of Japan's capital stock was lost in the earthquake, which equates to around 20 percent of the country's GDP, or $1 trillion.
"The bigger cost is rebuilding of capital stock. This type of problem really causes damage to capital stock. There's enormous damage to infrastructure -- installations,scarpe moncler, power plants, housing,Sac Louis Vuitton, factories, ports,borse moncler, coastline," Rossi said. "You couldn't possibly rebuild so extensively in the period of 1-2 years. I expect it would be 4-5 years of work."
She also said Japan's rich private sector was likely to supplement the debt-ridden government by selling its overseas assets and possibly using foreign exchange reserves, which could weigh on international markets.
Paul Newton, auto industry analyst for IHS Global,Canada Goose, speaking of the damage to the auto sector,moncler bambino, said the rebuilding had to encompass much more than just the country's production facilities to get the economy back on its feet.
"The tragic loss of life and homes across the region means that even if infrastructure and facilities can be repaired, whole communities that have supported many of these plants have been uprooted or are still unaccounted for," he said.
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