Read about the next year, three years from now, and 10 years from now
Posted: Tue Jul 01, 2025 9:53 am
A notable feature of the Great East Japan Earthquake is that there is a shortage of electricity due to the Fukushima Daiichi nuclear power plant accident and damage to thermal power plants along the coast, and because the Tohoku region is a major production base for electronic and automotive parts, the supply chain (supply system) has been disrupted, forcing production of automobiles, electronic devices, and other products to be scaled back.
In particular, "the impact will be large because electricity is related to all industries," said Nagahama Toshihiro, chief economist at the Economic Research Department of the Dai-ichi Life Research Institute. According to Nagahama's calculations, even if TEPCO were to restore its maximum power supply to 48 million kW/h by the end of July, this would reduce this year's GDP by 0.71%, or about 3.3 trillion yen.
Furthermore, taking into account the impact of remove background image supply chain disruptions, the negative effects of the nuclear accident, and the impact of various self-restraint measures, the report points out that the disaster as a whole will likely push down GDP by at least 8 trillion yen, or roughly 1.6%.
The government's GDP forecast for fiscal 2011 was 1.5% before the disaster, but the effects of the disaster could cause the economy to fall into negative growth this year.
However, the growth rate will not drop due to the "supply shock" until around summer, when electricity use will be significantly restricted. Production of electronic and auto parts is expected to recover, and electricity supply capacity will increase. Furthermore, from autumn onwards, the rebuilding of destroyed stocks - large-scale public works - will be fully implemented. This demand for reconstruction will increase the GDP growth rate.
From a supply shock to demand for reconstruction. Anticipating this trend, most economic research institutes have revised their growth rates for this fiscal year downward compared to pre-earthquake levels, and have increased the growth rates for fiscal 2012 and 2013.
In particular, "the impact will be large because electricity is related to all industries," said Nagahama Toshihiro, chief economist at the Economic Research Department of the Dai-ichi Life Research Institute. According to Nagahama's calculations, even if TEPCO were to restore its maximum power supply to 48 million kW/h by the end of July, this would reduce this year's GDP by 0.71%, or about 3.3 trillion yen.
Furthermore, taking into account the impact of remove background image supply chain disruptions, the negative effects of the nuclear accident, and the impact of various self-restraint measures, the report points out that the disaster as a whole will likely push down GDP by at least 8 trillion yen, or roughly 1.6%.
The government's GDP forecast for fiscal 2011 was 1.5% before the disaster, but the effects of the disaster could cause the economy to fall into negative growth this year.
However, the growth rate will not drop due to the "supply shock" until around summer, when electricity use will be significantly restricted. Production of electronic and auto parts is expected to recover, and electricity supply capacity will increase. Furthermore, from autumn onwards, the rebuilding of destroyed stocks - large-scale public works - will be fully implemented. This demand for reconstruction will increase the GDP growth rate.
From a supply shock to demand for reconstruction. Anticipating this trend, most economic research institutes have revised their growth rates for this fiscal year downward compared to pre-earthquake levels, and have increased the growth rates for fiscal 2012 and 2013.