The International Monetary Fund estimated that rebuilding after the Christchurch quakes will cost about 15 billion New Zealand dollars ($11.9 billion), a heavier burden on the national economy than Japan's 1995 Kobe quake and Chile's huge temblor last year.

"While the scale of damage from the recent Japan earthquake is still uncertain, it is likely to be less than the Canterbury earthquakes as a percent of GDP," or gross domestic product, the IMF said.

New Zealand's second largest city Christchurch was devastated by a 6.3-magnitude quake in February, which claimed 181 lives and followed a more powerful but less destructive 7.1 quake in September.

IMF economists said the quakes would wipe about two percentage points of economic growth this year, and the economy would only grow by about one percent.

"The earthquakes destroyed assets equal to about 2-3 percent of the nation's productive capital stock, and will have temporarily reduced potential output," it said.

"The earthquakes have caused substantial damage and hurt confidence," the IMF's annual report on the New Zealand economy said.

"Large uncertainty surrounds the economic outlook, particularly related to the size and timing of reconstruction from the earthquakes."

It also warned that economic risks were "tilted to the downside", especially if emerging Asia's strong demand for commodities falters, and long-term interest rates rise.

But it said that reconstruction work, once it gets underway, will push growth up to four percent next year.

The IMF also said the local dollar was "moderately" overvalued and that housing also appeared significantly overpriced.

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