Kishida Confirms Japan Overstated Construction Data Used in GDP
(Bloomberg) -- Japanese Prime Minister Fumio Kishida apologized for the government’s mishandling of economic data after media reports said it overstated construction order figures, a key numbers set used to calculate economic growth, for years.
“This is extremely regrettable and we need to examine how it occurred to ensure it doesn’t happen again,” Kishida said in parliament Wednesday.
The transport ministry had been double counting some data in its monthly construction orders survey, public broadcaster NHK reported, citing unidentified people familiar with the matter. The monthly release of orders from some 12,000 contractors is of particular importance for the government given that it feeds directly into the calculation of gross domestic product.
The overstating of the data goes back as far as eight years, according to the Asahi newspaper. Kishida said in parliament the ministry has corrected last year’s figures. It’s not the first time the government has mishandled data -- the health ministry published erroneous wage figures in 2018, leading to a massive reassessment of other economic releases.
“The accuracy of data is an important issue we need to take seriously,” Kishida said.
Flawed Wages Report Undermines Credibility of Japanese Data (2)
Japan said in 2019 it would review the handling of all its economic statistics after incomplete wage data saw it shortchange some 20 million welfare recipients by around $525 million in total.
While it’s still unclear how much data revision may occur this time from the overstated construction figures, economist Harumi Taguchi at IHS Markit said developments point to strains in Japan’s system to collect statistics.
“We’ve already had this problem in the past with wages data, but we need to ask why do these things happen, how was it not noticed for so long, and why haven’t past problems led to improvements,” said Taguchi. “Unless the country becomes really serious about this, the system will face institutional fatigue.”
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