Japan may need up to five years to rebuild from the disastrous earthquake and tsunami that has caused up to $235bn (£145bn) of damage, the World Bank said in a report.
It also estimates that 0.5 percentage points will be shaved from the country's economic growth this year.
However, it expects growth to pick up again in the second half of the year.
The 11 March earthquake and tsunami, disrupted production networks in the automotive and electronic industries.
"Damage to housing and infrastructure has been unprecedented," the World Bank said.
"Growth should pick up through subsequent quarters as reconstruction efforts, which could last five years, accelerate," it said.
The bank estimates the damage to be between $123bn and $235bn.
This is the equivalent of between 2.5% and 4% of the country's economic output in 2010.
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