The epic earthquake and tsunami that caused widespread devastation in Japan earlier this month may have cost $309 billion, which would make it the costliest disaster on record.
Japan’s Cabinet Office on Wednesday estimated the catastrophe, which also caused a major nuclear crisis, could cause losses between 16 trillion yen ($198 billion) and 25 trillion yen ($309 billion). That figure compares with estimates from the World Bank and Goldman Sachs (NYSE:GS) for losses of $235 billion and $200 billion, respectively.
The government also warned the earthquake, which was measured at a magnitude of 9.0, could lower the country’s economic growth rate lower by 0.5%.
''The most troublesome thing is harmful rumors and the psychological effect (on consumers) as a result of radiation concerns,'' economic and fiscal policy minister Kaoru Yosano told reporters, according to the Kyodo news agency.
On top of thousands of deaths and widespread property damage, Japan was paralyzed by a crisis at the Fukushima Daiichi nuclear facility that nearly escalated to a full meltdown.
The $309 billion price tag would make Japan’s earthquake the costliest on record, surpassing the $125 billion that the Insurance Information Institute estimates Hurricane Katrina cost the Gulf coast in 2005. It would also top the $100 billion in damage caused by the 1995 Kobe quake in Japan.
In the wake of this month’s earthquake, many major companies like Toyota (NYSE:TM) have been forced to halt production, further threatening Japan’s weak economy.
''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, a separate monthly government report said, according to Kyodo.