Japan admits to overestimating construction order data for years

General view of buildings under construction from Tokyo Tower in the city of Tokyo, Japan on August 6, 2021. Photo taken on August 6, 2021. REUTERS / Clodagh Kilcoyne

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TOKYO, Dec.15 (Reuters) – The Japanese government has overestimated data on construction orders received from the industry for years, Prime Minister Fumio Kishida said on Wednesday, a practice that may have had the effect of inflating the numbers of the country’s economic growth.

Kishida made the comment in a parliamentary session after an Asahi newspaper reported that the Ministry of Land, Infrastructure, Transport and Tourism had “rewritten” data received monthly from about 12,000 selected companies since 2013 at a rate of around 10,000 admissions per year.

It was not clear why the government began to rewrite the data, or how the gross domestic product (GDP) figures could have been affected.

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

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

The survey compiles public and private construction orders which, in FY2020, totaled about 80 trillion yen ($ 700 billion), and are among the data used to calculate GDP, according to the Asahi.

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

Companies that delayed in submitting order data often sent several months of numbers at a later date, Asahi said. In these cases, the ministry would ask local authorities to rewrite the orders for the combined months as a figure for the last single month.

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”.

The rewriting of the data, which could be against the law, continued until March, Asahi said.

($ 1 = 113.7100 yen)

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Reporting by Chang-Ran Kim, Tetsushi Kajimoto and Leika Kihara; Editing by Sam Holmes and Christopher Cushing

Our Standards: Thomson Reuters Trust Principles.

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