Japan‘s economy could record losses of up to $1.81 trillion if a megaquake, as has long been expected, were to occur off the country’s Pacific coast, causing devastating tsunamis, the collapse of hundreds of buildings and possibly the deaths of some 300,000 people, a report released today warns.

The expected economic damage of 270.3 trillion yen, or nearly half of the country’s GDP, is significantly higher than the previous estimate of 214.2 trillion yen as the new estimate takes into account inflationary pressures and updated data collected on the ground, and has increased the extent of areas expected to be flooded, the presidential report noted.

Japan is one of the most earthquake-prone countries and the government estimates there is about an 80 percent chance of an 8 to 9 magnitude earthquake along the Nankai Trench.

Under the worst-case scenario, based on the possibility of a 9-degree earthquake in the region, Japan will likely be forced to evacuate 1.23 million residents, or 10 percent of its total population.

Up to 298,000 people could lose their lives to tsunamis and building collapses if the earthquake occurs late in the evening one winter, the report shows.

The trench is about 900 kilometers long and is located off Japan’s southwestern Pacific coast, where the Philippine Plate dips beneath the Eurasian Plate.

The tectonic stress that builds up can result in a megaquake almost once every 100 or 150 years.

Last year, Japan first issued a warning of a “relatively higher probability” of a megaquake of up to 9 magnitude in the trench after the 7.1 magnitude tremor struck at the edge of the trench.

In 2011 a 9-magnitude earthquake that triggered a deadly tsunami and the subsequent nuclear disaster at the Daiichi plant in Fukushima killed more than 15,000 people.