Japan, what to expect after the earthquake

Very slowly the alert level is lowering and it was officially downgraded the alert level for tsunamis and fingers crossed, but for now it is too early to say, it would seem that the problem at Fukushima reactor has stabilized .

The question is : Now what happens.

The real tsunami in Japan will hit now the economy.

Having established the number of deaths and injuries, it will be the time to understand what will happen, the damage caused by the earthquake could result in a decrease of GDP, which Tokyo would fall again into a recession from which it seemed to be coming out.

The cataclysm smashed an area that has about 8% of GDP, with auto manufacturers, small and large businesses, paddy fields and nuclear plants.

The next Monday 14th March 2011, Toyota, Honda and Nissan will stop the production in all domestic plants and this will be another serious blow.

The reconstruction would allow relaunch the economic machine, but of course the risk is that it is going to increase the country’s already huge debt, estimated at 200% of GDP.

Another issue is insurances, that in two days have lost 10 billion dollars : from Munich Re, Swiss Reinsurance, all have recorded loss in the Stock Exchange yesterday.

The true test of what will happen however it will be only at the open on Monday of the Nikkei : Japan is a proud and compact country.

For sure the goverment and people will help Japan to see the sunshine again.