Taiwan's economic loss resulting from the Sept. 21 earthquake is estimated to be between US$3 billion to US$10 billion, or roughly 1.2 to 4 percent of the gross domestic product.
As a result, China Development Bank's latest report estimates economic growth will be dragged down 0.2 percentage points.
The bank's numbers yesterday came in contrast to figures that appeared earlier in local newspapers, which reported the bank estimated damages to exceed US$10 billion dollars.
China Development Bank's report is the first released by a domestic financial institution evaluating the overall economic damage of the earthquake.
The president of the bank, Liu Tai-Ying (
Compared with the bank's estimation of losses, figures released earlier by the Taiwan Institute of Economic Research (
TIER estimates that the total loss would be just 0.1 percent of the GDP.
TIER officials said that the damage had been concentrated largely in central Taiwan -- and important industries, such as microchip production, and overall productivity remain relatively intact.
"Industry loss is estimated only at about NT$180 billion dollars (US$5.6 billion)," said Ray B. Dawn (
However, in the bank's report, direct losses were estimated at US$30 billion; indirect losses associated with electricity stoppages and water shortages could push the tab much higher.
The report noted that industries such as microchip producers based in the Hsinchu Science-based Industrial Park and in Taoyuan were hit hard by electricity and water shortages.
The report also noted that there is close link between upper-middle-lower production in Taiwan's electronics industry.
Therefore, the indirect loss caused by discontinued production could drive up the total cost to about US$10 billion.
The report also predicted that for reconstruction efforts, the government's expenditure would be approximately US$30 billion to US$50 billion.
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