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[TOKYO] The Trans-Pacific Partnership (TPP) will play a key role in helping the Japanese government to boost economic growth, the Nikkei business daily reported on Saturday.
Prime Minister Shinzo Abe vowed in September to raise gross domestic product by nearly a quarter to 600 trillion Japanese yen (S$7 trillion), though he gave no timeframe.
A draft by the government's top economic advisory panel, the Council on Economic and Fiscal Policy, suggests the TPP free-trade deal, which still needs ratification, will help boost the nation's potential growth rate to around 2 per cent from current levels of below 1 per cent, the Nikkei said.
The draft says 25 trillion yen will likely come from increased exports thanks to TPP, which will also help orders for infrastructure work such as bullet trains to grow 30 trillion yen from 10 trillion yen in 2010, the Nikkei said.
Exports of farm and fishery products could grow over 2 trillion yen from around 600 billion yen last year, it said.
The draft also says capital spending will probably grow by more than 10 trillion yen through separate steps such as cutting the effective corporate tax rate below 30 per cent at an early date and scrapping regulations, the Nikkei report said.
Consumer spending, which accounts for 60 per cent of GDP, will rise about 60 trillion yen a year by raising the minimum wage 20 per cent in five years, according to the report.
Foreign tourists' spending will likely grow between 7 trillion yen and 10 trillion yen annually from 2 trillion yen in 2014, according to the Nikkei.
Private sector members of the council will present the draft at a meeting on Wednesday, it said. But some see the GDP target as unrealistic because it implies levels of growth not seen in the past two decades.