Daily Sabah logo

Politics
Diplomacy Legislation War On Terror EU Affairs Elections News Analysis
TÜRKİYE
Istanbul Education Investigations Minorities Expat Corner Diaspora
World
Mid-East Europe Americas Asia Pacific Africa Syrian Crisis Islamophobia
Business
Automotive Economy Energy Finance Tourism Tech Defense Transportation News Analysis
Lifestyle
Health Environment Travel Food Fashion Science Religion History Feature Expat Corner
Arts
Cinema Music Events Portrait Reviews Performing Arts
Sports
Football Basketball Motorsports Tennis
Opinion
Columns Op-Ed Reader's Corner Editorial
PHOTO GALLERY
JOBS ABOUT US RSS PRIVACY CONTACT US
© Turkuvaz Haberleşme ve Yayıncılık 2023

Daily Sabah logo

عربي
  • Politics
    • Diplomacy
    • Legislation
    • War On Terror
    • EU Affairs
    • Elections
    • News Analysis
  • TÜRKİYE
    • Istanbul
    • Education
    • Investigations
    • Minorities
    • Expat Corner
    • Diaspora
  • World
    • Mid-East
    • Europe
    • Americas
    • Asia Pacific
    • Africa
    • Syrian Crisis
    • Islamophobia
  • Business
    • Automotive
    • Economy
    • Energy
    • Finance
    • Tourism
    • Tech
    • Defense
    • Transportation
    • News Analysis
  • Lifestyle
    • Health
    • Environment
    • Travel
    • Food
    • Fashion
    • Science
    • Religion
    • History
    • Feature
    • Expat Corner
  • Arts
    • Cinema
    • Music
    • Events
    • Portrait
    • Reviews
    • Performing Arts
  • Sports
    • Football
    • Basketball
    • Motorsports
    • Tennis
  • Gallery
  • Opinion
    • Columns
    • Op-Ed
    • Reader's Corner
    • Editorial
  • TV
  • Business
  • Automotive
  • Economy
  • Energy
  • Finance
  • Tourism
  • Tech
  • Defense
  • Transportation
  • News Analysis

Japan admits exaggerating construction data used in GDP for years

by Reuters

TOKYO Dec 15, 2021 - 1:14 pm GMT+3
Japan's Prime Minister Fumio Kishida speaks to media at his official residence in Tokyo, Japan, Nov. 24, 2021. (Kyodo via Reuters)
Japan's Prime Minister Fumio Kishida speaks to media at his official residence in Tokyo, Japan, Nov. 24, 2021. (Kyodo via Reuters)
by Reuters Dec 15, 2021 1:14 pm

Japan's Prime Minister Fumio Kishida on Wednesday has admitted the Japanese government overstated construction order data used to calculate gross domestic product (GDP) for years, expressing regret over the practice that could hurt the credibility of official statistics widely used by investors and economists.

"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 newspaper reported the 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.

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 impact to be minimal, particularly as the builders involved were likely to be smaller firms.

While the impact 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.

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

"We can't help doubting this kind of issue could happen across government ministries," Sakai added.

Sloppy fraud

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

For the survey, the ministry collects monthly orders data from construction companies through local prefecture authorities.

Companies that were late in submitting data would often send in several months' worth of figures at once, the Asahi said. In these instances, the ministry would instruct local authorities to rewrite the orders for the combined months as the figure for the latest, single month.

Meanwhile, when an entry was missing from a company, the ministry would place a tentative figure by taking the average of the orders from the rest of the industry in that month, resulting in double-counting once the missing sum arrived, the newspaper said.

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

Considering Japan has hundreds of thousands of construction companies, the ratio of those concerned is very small, he said.

"How much influence do they have? The kind of sloppy company – which puts out numbers late – is probably not a big one."

Land Minister Tetsuo Saito, a member of the Komeito party – the junior partner of the ruling coalition – confirmed the practice in parliament, calling it "extremely regrettable."

Asked about the issue, the government's top spokesperson said only that the land ministry had been instructed to analyze "as soon as possible" what led to the practice.

"We will first wait for the results of that investigation," Chief Cabinet Secretary Hirokazu Matsuno told a news conference when asked whether past GDP figures, the government's monthly economic report or other data may need to be revised.

The rewriting of the data, which may be in breach of law, continued until this March, the Asahi said.

  • shortlink copied
  • Last Update: Dec 15, 2021 2:41 pm
    RELATED TOPICS
    fight-against-terrorism DEUTSCHE-BANK US-LIBYA-RELATIONS
    KEYWORDS
    japanese economy japan japan economy fumio kishida gdp overstated data
    The Daily Sabah Newsletter
    Keep up to date with what’s happening in Turkey, it’s region and the world.
    You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
    A crude oil tanker sails in the Bosporus, on its way to the Mediterranean Sea, in Istanbul, Türkiye, Dec. 11, 2022. (Reuters Photo)

    Türkiye registers better-than-expected current account gap

    current-account-balance
     Eastern Anatolian Fault line triggered another fault segment called the Sürgü fault, Middle East Technical University (METU), Ankara, Feb. 9, 2023. (DHA Photo)

    Accumulated tension of hundreds of years moved Anatolia by 3m

    Harold-Tobin

    Istanbul's spectacular, historical grand bazaars and markets

    Travel

    Istanbul's consulate chronicles: Sudhi Choudhary, Consul General of India

    SUDHI-CHOUDHARY
    No Image
    Huge wildfire forces thousands to evacuate in California
    PHOTOGALLERY
    • POLITICS
    • Diplomacy
    • Legislation
    • War On Terror
    • EU Affairs
    • News Analysis
    • TÜRKİYE
    • Istanbul
    • Education
    • Investigations
    • Minorities
    • Diaspora
    • World
    • Mid-East
    • Europe
    • Americas
    • Asia Pacific
    • Africa
    • Syrian Crisis
    • İslamophobia
    • Business
    • Automotive
    • Economy
    • Energy
    • Finance
    • Tourism
    • Tech
    • Defense
    • Transportation
    • News Analysis
    • Lifestyle
    • Health
    • Environment
    • Travel
    • Food
    • Fashion
    • Science
    • Religion
    • History
    • Feature
    • Expat Corner
    • Arts
    • Cinema
    • Music
    • Events
    • Portrait
    • Performing Arts
    • Reviews
    • Sports
    • Football
    • Basketball
    • Motorsports
    • Tennis
    • Opinion
    • Columns
    • Op-Ed
    • Reader's Corner
    • Editorial
    • Photo gallery
    • Jobs
    • privacy
    • about us
    • contact us
    • RSS
    © Turkuvaz Haberleşme ve Yayıncılık 2021