Japan PM's Orders new stimulus measures to achieve $5 Trillion Economy

Japan Prime Minister ordered the government Wednesday to create an economic stimulus measure to expand the economy to 600 trillion yen, or almost $5 trillion within five years.

According to Reuters, Japanese Prime Minister Shinzo Abe's call to action would encourage firms to invest on plants and equipment, as well as raise wages to generate growth led by Japan's private sector. Abe in a meeting said, "In order to achieve the biggest GDP in the postwar era, the business circles need to tackle capital spending and wage hikes. The government will quickly consider steps to support it." He said he wasn't Economic Minister Akira Amira to come up with urgent measures that would help realize the 600 trillion yen GDP.

The Japan Times reported that the GDP goal, which is set for 2020, is almost a 20 percent increase from 2014's 491 trillion yen. According to reports there are growing skepticisms from economists on whether the goal can be achieved. One of the proposed measures is to increase private consumption to 60 trillion yen from 293 trillion yen last year. This could be achieved through wage increase, which should be raised by 3 percent annually. Lifting the legally binding minimum wage is another way to achieve the goals. Members of the academe and the business sector also encouraged the government to slash corporate tax rate further below 30 percent.

Meanwhile, Bloomberg Business reported that economists are expecting Japan's third quarter GDP to be lower due to weak data that points to another recession. The country's GDP dropped by an annualized 0.3 percent in the third quarter, from a 1.2 percent decrease in the second quarter. That is lower than the expected 0.6 percent expansion.

Growth is projected in the fourth quarter, but pressure is mounting on PM Abe and central bank Governor Haruhiko Kuroda to increase fiscal and monetary stimulus. This may be the major reason for Abe's call to action for the government to come up with new economic stimulus.