With the terrible disaster in Japan still unfolding, it is too early to forecast the impacts on the Queensland and broader Australian economies (See e.g. Impact is ‘unknowable’). The Queensland economy is clearly vulnerable, however, as Japan is our largest trading partner, buying around $10 billion of our merchandise exports each year:
Our already depressed tourism sector is also vulnerable:
Japan quake could impact Coast tourism
The Japanese disaster will hence add to the negative economic shock Queensland is already experiencing in the first half of 2011, reinforcing the economy’s sluggishness, although the shock shouldn’t be large enough to drive us into a recession.
Economic history shows economies can recover rapidly from disasters – as was indeed shown by Japan’s recovery after WWII – so it’s expected that any drop off in Japanese demand for our goods would only be temporary. See, for example:
Recovery from natural disasters
Japanese demand for our coking coal may actually increase over the medium-term, as steel will be required for the reconstruction of damaged infrastructure and buildings. But it is far too early to know for certain, and we must pray that the nuclear reactors don’t melt down and bring much greater tragedy.
Queensland Economy Watch 