Christchurch Earthquake: Estimated Economic Impact

Building rubble is strewn across the street from damaged buildings in the city centre after a 7.1 magnitude earthquake struck 30km west of Christchurch city at 4:35 am on the morning of September 4. Photo by Kurt Langer/Getty Images

The New Zealand Treasury has issued an economic brief outlining the impact of the Christchurch earthquake on the New Zealand economy.

The economic impact and damage estimates are highly uncertain at this early stage. The overall GDP impact will be smaller than the final damage bill.

The negative impact on the GDP in the September quarter is likely to be around 0.4 per cent. Recovery and repair work over the next three quarters will likely offset this and boost GDP in the year to June 2011, according to the brief.

The boost to economic activity from rebuilding over the next couple of years will depend on the amount of damage. Treasury is assuming that the cost of the earthquake will reach $4 billion, including $2 billion worth of estimated damage to private dwellings and their contents, $1 billion of damage to commercial property, and $1 billion worth of damage to public infrastructure.

The full cost of the damage will not be known until all insurance claims have been lodged and assessed. The Earthquake Commission estimates damage to private dwellings and their contents could be $1 billion to $2 billion.

Meanwhile, 10 days after the quake aftershocks are still occurring regularly. This morning, in the space of 10 minutes, three shocks ranging from 3.4 to 3.9 magnitutde were recorded, according to Geonet.