Japan defended itself yesterday against an allegation that it had cooked the books to make its economy look better, but the controversy revived doubts about the reliability of official data on the world’s number two economy. The Economic Planning Agency denied suggestions in a New York Times report that political pressure from the ruling coalition had prompted it to omit an unfavourable chunk of data from its October-December gross domestic product report.
The agency said the return of the missing data – as planned – would make it harder to hit the government’s GDP fiscal year growth target, and the latest flap highlighted recurrent criticism that Japan’s GDP data is unreliable. “We omitted the final results for financial institutions’ fixed investment from the revised GDP report for purely technical reasons, and there was absolutely no room for political pressure,” said Akira Sadahiro, head of the EPA’s Economic Research Institute.
Wednesday’s New York Times report sent a ripple though markets overnight, helping knock the yen down 1.25 percent against the dollar, but the report was largely shrugged off in Tokyo, where reservations about EPA data are deep-set. “It is very regrettable that such groundless reports have circulated domestically and overseas,” Sadahiro told a news conference called to rebut the Times’s allegations.
But he said that, if included, the revised data – showing banks and insurers sharply curbing capital spending – would have forced the EPA to revise October-December down by about 0.2 percentage point from the original report of a 1.4 percent drop. The revised revision will now show a 1.6 percent fall.
“This incident has hurt the credibility of the Japanese government’s economic data, which was not very trustworthy anyway,” said Kenji Arata, economist at MCM Asia Pacific. Reuters