Reports say Japan's Abe to air plan for $5 trillion economy

Tokyo: Japan's prime minister Shinzo Abe, fresh from a bruising battle over unpopular military legislation, plans to announce a fresh outline for reviving the world's third-largest economy that would set a GDP target of 600 trillion yen (USD 5 trillion).

The national broadcaster NHK and other media said Abe will explain his plan in a news conference Thursday evening. Abe recently was re-elected head of the ruling Liberal Democratic Party.

He has promised to refocus on the economy after triumphing over opponents to security legislation enabling Japan's military to participate in combat even when the country is not under direct attack.

Thousands of Japanese gathered for noisy street protests last weekend over the "collective self-defense" law, and Abe's popularity ratings took a hit.

Abe took office in late 2012 promising to end deflation and rev up growth through strong public spending, lavish monetary easing and sweeping reforms to help make the economy more productive and competitive.

So far, those "three arrows" of his "Abenomics" plan have fallen short of their targets though share prices and corporate profits have soared.

"He has to deliver the message that he is so committed to achieving the economic agenda, that is, to make people's lives better," said Masamichi Adachi of JPMorgan in Tokyo.

NHK said Abe will outline plans for better social services to lighten the burden of child and elder care for struggling families in the coming three years of his administration.

He also will pledge more help for the poor, especially children living in poverty.

Japan's economy, estimated at USD 4.6 trillion in 2014, contracted at a 1.2 per cent annual rate in the April-June quarter. Economists have warned that China's slowdown and market turmoil might weaken an expected recovery.

The biggest hurdle to faster growth is the apparent reluctance of Japanese employers to raise wages, despite severe labor shortages in many industries.

With wages still barely rising, families have tended to save, and increases in demand from monetary stimulus have been weaker than expected.