Japan Admits Overstating Economic Data for a Decade

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

It was not clear why the government started the practice of rewriting the data. It is also unclear how GDP figures may have been affected, though analysts expected any effect to be minimal, particularly as the builders involved were likely to be smaller firms, Aljazeera said.

“It is regrettable that such a thing has happened,” Kishida said. “The government will examine as soon as possible what steps it can take to avoid such an incident from happening again.”

He made the comment in a parliamentary session after the Asahi Shimbun newspaper reported Japan’s Ministry of Land, Infrastructure, Transport and Tourism had been “rewriting” data received from about 12,000 select companies since 2013 at a pace of about 10,000 entries per year.

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

While the effect on past GDP numbers may be small, the revelation is likely to raise questions about the reliability of data that is a cornerstone for economists and investors looking to understand and forecast trends in the world’s third-largest economy.

It is also not the first time that issues have been raised about government data, including a flaw in health ministry data in 2018.