BIGCAPITAL's Blog

March 29, 2011

Japanese reconstruction may boost GDP growth

Japanese reconstruction may boost GDP growth

Experts suggest the massive Japanese earthquake may push up the country’s gross domestic product (GDP) as a result of the reconstruction efforts but Japanese equities and insurers are likely to suffer.

A report from Citi expects reconstruction demand will materialise in the second half (H2) of 2011, eventually pushing up GDP.

“We estimate the net impact on GDP growth in 2011 at +0.2% to 0.3% points,” said Citi.

This supposition was supported by rating’s agency Moody’s.

“Reconstruction spending will likely prove to be a very effective and justifiable fiscal stimulus. Such expenditure will likely offset the economic impact from immediate losses in production and demand,” it said.

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That is why Warren Buffett said Japan represents a buy opporunity: Pace of reconstruction in stunning

That is why Warren Buffett said Japan represents a buy opporunity: Pace of reconstruction in stunning

Tsunami came and left giant gaps on Japan well constructued roads. That was the story of the Tsunami and the earthquake of March 11.

But then came the power of the Japanese people as they reconstructed what the quake had taken away. The astonishing speed of reconstruction is being used to highlight the nation’s ability to get back on its feet. Work began on March 17 and six days later the cratered section of the Great Kanto Highway in Naka was as good as new. It was ready to re-open to traffic last night.

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