Two earthquakes that rocked Venezuela on June 24 caused $19.6 billion ​in direct physical damage, but the cost of rebuilding could be twice that much ‌or more, the World Bank said in an early assessment released on Thursday.

The 7.2 and 7.5 magnitude quakes killed about 5,000 people, according to the government, destroying residential buildings, infrastructure and non-residential buildings in the northern areas of the country, including the ​capital Caracas. The government estimates that nearly 17,000 people were injured and nearly 18,000 remain ​homeless.

The disaster, the country's deadliest earthquake since 1812, came at a time when socioeconomic conditions were ⁠already precarious, with a poverty rate of over 76%, the World Bank said. Some 7.9 million people ​have fled the country since 2015.

"The earthquake caused an estimated $19.6 billion in direct physical damage, a staggering figure ​for any economy and one that demands a coordinated response," said Susana Cordeiro Guerra, the World Bank vice president who oversees Latin America and the Caribbean.

"Without timely additional investment, the negative impact on productive capacity and living standards will slow the ​path to recovery," she said.

The bank completed its Global Rapid Damage Estimation or GRADE using remote-based earthquake ​modeling, local seismic data, satellite imagery and damage reports from government, humanitarian agencies and others on the ground.

The estimate does ‌not ⁠include the cost of "building back better" through structural improvements or upgrading the construction type. Those costs, including debris clearance, could be two to two-and-a-half times the replacement costs, which could drive the total bill to close to $50 billion.

The estimate also does not include direct economic losses, with labor supply expected to be reduced ​by 1% this year.

The bank ​said it was working ⁠with the Venezuelan government, the Inter-American Development Bank, and the Development Bank of Latin America (CAF) on a more comprehensive assessment of Venezuela's recovery and reconstruction costs. ​Such studies usually take months, while GRADE assessments are done in weeks.

The assessment ​showed that 47% ⁠of the damage occurred in residential buildings, 27% in infrastructure and 26% in non-residential buildings.

The bank said the pace of reconstruction would be a decisive factor in shaping the country's economic recovery and social outcomes. Without higher ⁠public ​and private investment, productive capacity and GDP would likely remain below ​pre-quake levels until at least 2036, the bank said.

Additional borrowing would add to Venezuela's already large debt stock, but could stoke stronger ​growth, which would gradually strengthen the country's fiscal position, it said.

Source: Reuters

--Agencies