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New Zealand earthquake: Economy takes a hit, too

New Zealand earthquake losses could reach $12 billion or more, because of the huge impact from indirect losses.

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Rescue workers are lowered by crane onto the top of the Christchurch Cathedral in Christchurch, New Zealand, Feb. 25, 2011 after the city was hit by a 6.3 earthquake Feb 22. As residents pick up the pieces, the stark economic toll of the New Zealand earthquake is coming into focus.

Rob Griffith/AP

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As New Zealand begins to pick up the pieces from Tuesday's huge earthquake in Christchurch, it's beginning to tote up the magnitude of the economic toll. There are direct losses:

Indirect economic losses, however, could double or even triple those totals, especially in the next few months. That's because earthquakes tend to have a bigger impact on infrastructure, such as roads and water, than other large-scale natural disasters, such as hurricanes. As of Friday morning local time, for example, 32 streets and 13 bridges were closed to traffic, according to Christchurch City Council.

That's a blow to businesses trying to move products in and out of the area.

"They have to reroute to find a second-best transportation network," says JiYoung Park, a professor of urban and regional planning at the Universtiy of Buffalo's school of architecture and planning. "The transportation costs will be increased."

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