Ripples To Reach Indian Shores

Japan is going through one of the worst crises since World War II. The loss of property, assets, and human capital has been catastrophic.Rebuilding homes, factories, roads and bridges destroyed by the tsunami and the subsequent nuclear disaster could cost as much as $200 billion, making it the most expensive rebuilding exercise ever. In addition, the indirect cost will take a heavy toll on the Japanese economy. The country is already hugely indebted: its debt to GDP ratio is 200 per cent compared to 90 per cent for the US and 45.3 per cent for India. So far the high level of debt hasn’t been a cause for concern since most of it is domestically held. But raising the cash required for the rebuilding exercise will put pressure on the Japanese government, while the Bank of Japan will have to usher in a conducive monetary policy. Accordi