The massive earthquake in northeast Japan, which also triggered a tsunami that has caused extensive damage, is not expected to deal a killing blow to the country's economy, said an expert with Austrian Raiffeisen Bank in a report issued Monday.

Ingo Jungwirth, the bank's Japan analyst, noted that the economic consequences of natural disasters can last only shortly for advanced economies. Investments for reconstruction could compensate production loss and new technologies used for the modernization of infrastructure and production capacity could drive a country's economy growth, he said.

He estimated that Japan's economy is likely to fall back into recession in the first two quarters of this year while in the second half of this year, the production loss is likely to be offset by greater economy activity.

For the entire year of 2011, the production loss was estimated to account for one to two percent of Japan's Gross Domestic Product, equivalent to a standstill of economic life in Japan for about one week, he added.

Regarding the Japanese yen's future development, the currency, in a first phase, could maintain stability or rise temporarily as overseas savings to be brought back to finance reconstruction will enhance its exchange rate. However, Japan's central bank is likely to intervene against the yen's rise in order to protect its export industry.

In a second phase, after the repatriation of savings, the purchase of imported good for reconstruction could again lead to a weaker yen.

Jungwirth also pointed that the earthquake in Japan should not have a significant impact on the global economy, if nuclear reactors there are under control. If not, the consequences are not predictable, he added.