New Zealand earthquake to cost $ 11 billion

Christchurch: The Christchurch earthquake will cost up to $11 billion and affect GDP growth by 1.5 per cent, the New Zealand government said on Sunday.

But the government predicted a silver lining in 2012, as rebuilding gets underway.

"We estimate that GDP growth will be around 1.5 per cent points lower in the 2011 calendar year solely as a result of the February earthquake," Xinhua quoted treasury authorities as saying in the monthly economic indicators for February.

Christchurch was hit by a 6.3 magnitude earthquake on February 22 killing 165 people.

"From 2012, the recovery will bring a sizable boost to residential, commercial and infrastructure investment, placing upward pressure on prices depending on the rate of rebuilding."

The authorities have said the earthquake had a large cost in human and economic terms and emphasized its estimates were early and tentative.

"The outlook for the New Zealand economy was weaker even before the earthquake as domestic demand was soft despite income gains from high commodity prices.

"The earthquake will have a negative impact on economic activity in 2011, but a positive impact from 2012 as the rebuilding gets underway," the authorities stated.

Christchurch, New Zealand's second largest city after Auckland, was hit by 6.3 magnitude earthquake on February 22. It killed 165 people and left parts of the city in ruins.

(For updates you can share with your friends, follow IBNLive on Facebook, Twitter, Google+ and Pinterest)