A free trade deal with the European Union would boost Japan's gross domestic product (GDP) by 1 percent annually once the benefits fully kick in over 10 to 20 years, a government estimate showed on Thursday.

Prime Minister Shinzo Abe has been promoting free trade as a pillar of his growth strategy. Japan and the EU, which concluded negotiations on the trade pact, hope that it will go into effect early 2019, media reports say.

The Cabinet Office estimated that the trade pact would lift Japan's GDP by 5 trillion yen ($44 billion) per year, or about 1 percent, and create an additional 290,000 jobs, according to the estimate by the Cabinet Office.

However, Japan's farmers would be hit as tariffs on wheat, beef and other food imports will be slashed, intensifying competition with domestic producers. The Cabinet office estimated that domestic farm production would drop by 60 billion to 110 billion yen.

The deal will remove the EU's 10 percent tariffs on Japanese cars and 3 percent typically applied to car parts.

The agreement will also scrap Japanese duties of 30 percent on EU cheese and 15 percent on wines as well as allowing it to increase its beef and pork exports.

The Cabinet Office also estimated the 11-nation Trans-Pacific Partnership, which requires more work after the United States pulled out of it early this year, would raise Japan's GDP by about 1.5 percent annually, or 8 trillion yen, and create 460,000 jobs.

In November, the countries remaining in the TPP agreed on the core elements to move ahead without the United States but more work need to be done before it is finalized.

The Cabinet Office also showed the TPP 11 would cut Japan's farm production by 90 billion yen to 150 billion yen.

In 2015, the government predicted the 12-nation TPP, including the United States, would increase Japan's GDP by 2.6 percent, or 13.6 trillion yen, and would add 795,000 jobs. It would also lower farm output by as much as 210 billion yen.

Japan's economy grew an annualized 2.5 percent in the third quarter to mark a seventh straight quarter of expansion thanks to a business spending splurge and buoyant exports.