WELLINGTON (Reuters) - The earthquake which shattered the New Zealand city of Christchurch on February 22 would cost the country up to NZ$15 billion ($11 billion) and will also wipe 1.5 percent off 2011 GDP over five years, Finance Minister Bill English said on Sunday.
"Paying for the earthquake will likely involve a balanced combination of a bit more borrowing in the short term and reconsidering our spending priorities," English said.
"And we'll also press on with our broader economic programme to reduce New Zealand's vulnerability to foreign lenders, get the government's finances in order and build faster growth based on higher national savings and exports," he added.
The Treasury estimated the total financial cost of damage from the earthquake at between NZ$10 billion and NZ$15 billion - two to three times the estimated NZ$5 billion cost of the first earthquake last September.
In addition, the wider economic impact of the earthquake, combined with already slower economic growth than forecast in the half year update in December, could leave nominal GDP a cumulative NZ$15 billion lower over the five years to 2015.
That is equivalent to about 1.5 per cent of the total value of GDP over this period, it said.
The latest death toll from the earthquake is 166, but is likely to rise above 200 as the search for survivors was officially called off on March 3, with buildings, roads, electricity and water infrastructure all severely damaged in the magnitude 6.3 shake.
Early estimates are that as much as a third of the central business district will have to be demolished, with several thousand houses in the worst hit suburbs also likely to have to be replaced.
(Reporting by Adrian Bathgate)