(Mainichi: November 5, 2015 – p. 7)
The government held a meeting of the Council of Economic and Fiscal Policy, chaired by Prime Minister Shinzo Abe, and presented its measures for achieving “600 trillion yen in nominal gross domestic product (GDP).” It explained that it will achieve 600 trillion yen by around 2020 by raising the GDP about 110 trillion yen (from 491 trillion yen in fiscal 2014). The increase will be accomplished through increasing exports of infrastructure projects by utilizing the Trans-Pacific Partnership (TPP) free trade pact, as well as by raising wages and promoting employment of women. Prime Minister Abe instructed the panel to “urgently come up with measures in November.”
According to private-sector members of the council such as University of Tokyo Prof. Motoshige Ito, the government plans to achieve some 60 trillion of the 110 trillion yen increase in GDP by raising “the potential growth rate” from one percent to about two percent. Regarding the remaining 50 trillion yen, it explained that it plans to push up GDP by raising wages and prices. It emphasized 3% growth in wages on a par with the government’s goal for the nominal growth rate with an eye toward boosting consumption.
The government has high expectations for the TPP to raise the potential growth rate. It has calculated that exports of infrastructure such as “power plants” will grow from 10 trillion yen in 2010 to a scale of 30 trillion yen. It also explained that it will raise capital investment 10 trillion yen by lowering the effective corporate tax rate and by relaxing regulations. It said that it will increase consumption by foreign visitors to Japan from 2 trillion yen in 2014 to 7-10 trillion yen [in around 2020]. As part of measures to counter the population decline, it will increase jobs for women and the elderly by 5 million.
However, in order to realize GDP of 600 trillion, it is necessary for the nominal GDP to grow at an average rate above 3%. However, Japan has not achieved a rate that high since 1991, when it recorded nominal GDP growth of 4.9%. (Slightly abridged)