Japan Gov’t Admits Overstating GDP Component for Years

Japan’s Prime Minister, Fumio Kishida, said on Wednesday that the japanses government overstated data on construction orders for years, raising concerns on the credibility of the country’s official statistics.

Kishida told parliament on Wednesday that the government will “prevent a similar incident from happening again” after the Asahi newspaper reported that the Ministry of Land, Infrastructure, Transport and Tourism had been “rewriting” data received from construction firms.

For Japan’s construction survey, some firms would submit their data late — instead of recording “zero” for a month with no available entry, the ministry would instruct authorities to record an averaged figure instead. This resulted in inaccuracies and, once the missing entry arrived, double counting.

Land minister Tetsuo Saito confirmed that data padding had occurred and offered an apology during the parliament session, saying that it was “extremely regrettable” and that they have corrected monthly construction orders data from January 2020 to March this year as a reference.

An official from the ministry said that the practice may have begun in way back in 2000.

Economists said that the padded data are likely to have minimal impacts on Japan’s gross domestic product figure, although it undermines the credibility of the country’s official statistics.

“What matters is the reliability of economic data and the latest revelation could become a body blow,” said Toru Suehiro, a senior economist at Daiwa Securities, noting that economists rely on the accuracy of government data.

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