Though it is early to estimate the losses from the massive earthquake and tsunami, the catastrophe is expected to put intense strain on Japan's economic resources.
Today's devastating quake has dealt another blow to the ailing Japanese economy, already faced with mounting debts and falling exports.
Though it is early to estimate the losses from the massive earthquake and tsunami, the catastrophe is expected to put intense strain on Japan's economic resources.
This is the latest of the reverses hitting the world's third largest economy in recent weeks, after political uncertainty and more than expected economic contraction in the 2010 December quarter.
"This is a big disaster. Japanese economy has not been doing well... and (the calamity) is going to have a pretty strong impact on the Japanese economy," global consultancy Deloitte's principal economist Shanto Ghosh said.
In the developed world, Japan's debt burden is among the highest and is pegged at around 200 per cent of its yearly economic output.
The island nation is prone to natural disasters and going by reports, the Kobe earthquake of 1995 had resulted in a loss of over 10 trillion yen for the Japanese economy.
"Obviously, today's disaster will have a huge strain on the country's resources," Ghosh noted.
The export-oriented economy shrank more than expected at 1.3% in the last three months of 2010 as compared to the earlier projection of 1.1%.
Despite unprecedented measures including massive stimulus packages, Japan continues to nurse the deep wounds inflicted during the global financial crisis of 2008-09.
The turmoil had rattled the national economy, which is beset by the problem of an ageing population.
The domestic currency has been on the rise adversely impacting exporters as their wares are becoming less attractive in the international markets.
Bogged down by high debt, the country might also find it challenging to make borrowing arrangements to meet expenses related to the present disaster.
Japan, which remained the world's second largest economy for over four decades, was toppled from the spot by China last month.
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