TOKYO—The Japanese government said Wednesday that damage from the devastating March 11 earthquake and tsunami could be more than double the cost of the Kobe earthquake, putting new fiscal pressure on an already debt-strapped government that will likely force the cabinet to abandon self-imposed borrowing limits.

In its first forecast of the cost of the disaster, it said the total cost from damage to houses, factories and public infrastructure such as roads and bridges would likely range from ¥16 trillion ($198 billion) to ¥25 trillion over the next three years. That compares with about ¥10 trillion of damage, not adjusted for price changes, from the Kobe quake. At 1995 exchange rates, the Kobe quake cost about $100 billion.

Although many economists say extra spending and borrowing is necessary given the scale of the damage, more debt would further worsen Japan’s precarious fiscal condition, which is considered the worst among industrialized nations, with public debt at roughly twice annual economic output.

The government’s estimate is in line with the World Bank’s estimate of $122 billion to $235 billion in damages, citing outside estimates.

The government had vowed in its budget-overhaul plan last June to hold new debt sales below ¥44.30 trillion for the 2011 fiscal year starting in April. Its ¥92.41 trillion budget calls for sales of ¥6.09 trillion in construction debt and ¥38.208 trillion in deficit-financing bonds.

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