Tsunami impact will be short-term, Japan will recover: World Bank

The short-term impact of the massive earthquake and tsunami that hit Japan over a week ago could be great, though it will be for a short period, World Bank chief economist and senior vice-president Justin Yifu Lin said on Monday.

"It is a little bit too early to give an accurate estimate to the economic loss of the earthquake and ensuing tsunami," he said, adding that the loss could be between 2.5 to 4% of Japan's GDP (Gross Domestic Product), or $120-230 billion.

In the short term, the loss could be great, Chinese state-run news agency Xinhua quoted him as saying in an interview.

"The international financial market is sensitive to disasters. Appreciation of the yen and the drop of foreign trade in Japan would also affect the economy of some other countries," he said.

Northeastern Japan, which was severely struck by the quake and tsunami, is a major base for auto production and many of Japan's auto manufacturers shut down after the earthquake.

Steel plants have also been affected, according to earlier reports.

However, Lin noted that post-quake reconstruction efforts would give a boost to Japan's economy and it would soon recover.

"After a year, Japan's imports will return to the level as before the quake, while its exports will rebound to 80%," Lin said.