Fears over New Zealand’s economy have grown during the past 24 hours after a new report indicates the Christchurch clean-up bill could reach $12 billion.
The reports come as Christchurch police say they will reveal some of the names of the 76 people killed in the earthquake along with a missing persons list after confusion erupted over the accuracy of missing persons estimates. .
Reuters has reported that investment bank JP Morgan expects the repair bill will cost upwards of $12 billion, with many buildings still standing likely to need reconstruction.
NZ Finance Minister Bill English said the Government will be able to absorb the cost of damage without suffering a ratings downgrade but the country will have to borrow more funds.
“These are bigger costs but we are in a sound enough position to handle it,” he said.
NZ Reserve Bank governor Alan Bollard said the central bank will work with local financial institutions to ensure finances are available for residents.
“We have ample cash reserves and will issue cash to banks on any day required during this emergency situation,” he said.
But with so many businesses destroyed analyst Moody’s Analytics said the blow to the economy will be “devastating” because the New Zealand economy is already in a precarious position – the NZ dollar fell from US76 to US74 cents this week.
“New Zealand’s ability to support higher government debt is perhaps somewhat lower than in other countries given the country’s relative lack of economic diversity and reliance on external funding,” it said.
Some economists said they expect the Reserve Bank to keep interest rates on hold, with Deutsche Bank chief economist Darren Gibbs telling the New Zealand Herald that rates may remain low due to the already fragile economy.
“The economy was already struggling to find its way out of recession before this earthquake,” Gibbs says.
“It is going to put the whole rebuilding process back and obviously there are going to be broader implications for confidence up and down the country, not just in Canterbury.
In Australia the disaster caused insurer IAG to downgrade its forecast insurance profit margins for 2010-11, revealing that claims related to the quake are likely to be $40 million.
Police have abandoned some areas of the city to focus on buildings where they believe people may still be alive.
They have begun to crack down on looting in the city, with reports of arrests due to the curfew being broken.
Officials warned against panic buying after reports of lines up to a kilometre long outside some petrol stations.
Prime Minister John Key said in a press conference that hopes of finding more people alive are fading although rescuers are still scoping out buildings for survivors.
“I think the large reason why (emergency services) are describing this as more likely to be a recovery than a rescue is they’re not getting positive signs that people are there,” he told TV3 in New Zealand.
“That does not mean that there can’t and won’t be people trapped in buildings.”
He said a small list of those killed will be released initially with more to be added eventually.
English told the ABC this morning there are still about 300 people missing and “we would hope that over the next couple of days, as people report in, that number will drop”.
But he said that “as the hours tick by the possibility of people being found alive is dropping off”.
There were reports of a woman’s voice from the Holy Cross Church overnight but rescue workers were unable to find anyone when they searched the rubble.
Police commissioner Howard Broad told a press conference his officers are taking their time because they don’t want to release a false report on how many people are trapped or deceased.
“Now just imagine if we get this wrong, if we’re sloppy, if we tell a family that their loved one is dead and we made a mistake,” he says.
“So we’re not going to do that, we are going to work carefully, methodically and we’re going to get it right.
“Unfortunately that means that this will take some time and we’re going to experience some criticism for the amount of time that this takes.”
More than 1000 rescuers are helping to clean up collapsed buildings throughout the city, with many teams coming from overseas.
Task forces from the United States and Australia have been sent to assist with the recovery, along with hundreds of police officers.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
