Japan admits overstating some government economic data for years – Reuters

Government will consider as soon as possible what steps it can take to prevent such an incident from happening again: PM Kishida


By Reuters

Published: Wed 15 Dec 2021, 07:37

The Japanese government has overstated data on construction orders received from builders for years, Prime Minister Fumio Kishida said on Wednesday, an admission that could damage the credibility of official statistics widely used by investors and economists.

Why the government started to rewrite the data was unclear. It’s also unclear how the gross domestic product (GDP) figures may have been affected, although analysts expected any impact to be minimal, especially since the builders involved were likely smaller companies. .

“It’s unfortunate that such a thing happened,” Kishida said. “The government will consider as soon as possible what steps it can take to prevent such an incident from happening again.”

He made the comment during a parliamentary session after the Asahi newspaper reported that the Ministry of Lands, Infrastructure, Transport and Tourism had “rewritten” data received from around 12,000 selected companies since 2013 at a rate of approximately 10,000 admissions per year.

Kishida said “improvements” had been made to the figures since January 2020 and there was no direct impact on the GDP data for fiscal years 2020 and 2021.

While the impact on past GDP figures may be small, the revelation is likely to raise questions about the reliability of the data which is a cornerstone for economists and investors seeking to understand and forecast trends in the economy. third largest economy in the world.

It’s also not the first time that issues have been raised over government data, including a flaw in Health Department data in 2018.

“The biggest problem is not the effect on GDP per se but the damage to the reliability of (official) statistics,” said Saisuke Sakai, senior economist at Mizuho Research and Technologies.

“We can’t help but doubt that this kind of problem can happen in all ministries,” Sakai said.


The survey compiles public and private construction orders which in fiscal 2020 totaled around 80 trillion yen ($700 billion) and is part of the data used to calculate GDP.

For the survey, the ministry collects monthly data on construction company orders through local prefectural authorities.

Companies that were late in submitting their data often sent several months worth of figures at a time, Asahi said. In these cases, the ministry would ask local authorities to rewrite the orders for the combined months as the single last month figure.

“Overall GDP data is unlikely to change much,” said Akiyoshi Takumori, chief economist at Sumitomo Mitsui DS Asset Management.

Considering that Japan has hundreds of thousands of construction companies, the ratio of people involved is very low, he said.

“What is their influence? The kind of sloppy company – which publishes its figures late – is probably not very important.”

Lands Minister Tetsuo Saito, a member of the Komeito party – the ruling coalition’s junior partner – confirmed the practice in parliament, calling it “extremely regrettable”.

Asked about the issue, the main government spokesman said only that the Ministry of Lands had been instructed to analyze “as soon as possible” what had led to the practice.

“We will wait for the results of this survey first,” Chief Cabinet Secretary Hirokazu Matsuno said at a news conference when asked if past GDP figures, the government’s monthly economic report or other data needed to be revised.

The data write-back, which may be against the law, continued through March, the Asahi said.

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