Japan recognizes economic growth for nearly a decade | Business and Economy

The Japanese government increased the building rules received from the builders over the years, Prime Minister Fumio Kishida said on Wednesday, an agreement that could boost the reliability of the figures used by investors and financiers.

It is not clear why the government initiated the data-recording process. It is also unclear how the gross domestic product (GDP) may be affected, although experts expect the impact to be minimal, especially since the builders involved should be small companies.

“It is unfortunate that such a thing has happened,” Kishida said. “The government will soon review what it can do to prevent this from happening again.”

He made the remarks at a parliamentary session after the Asahi Shimbun newspaper reported that the Ministry of Lands, Construction, Transport and Tourism “rewrote” the receipts received from about 12,000 nominated companies since 2013 at around 10,000 a year.

Kishida said they have “changed” the figures since January 2020 and that there is no direct impact on domestic gross domestic product (GDP) for the 2020 and 2021 financial years.

When the effect on old GDP numbers however small, the revelation could raise questions about the reliability of the cornerstone data for financial analysts and investors looking to understand and reflect on what is happening in the third world economy.

This is not the first time that issues have been raised in the public service, including the Ministry of Health’s shortcomings in 2018.

“The biggest problem is not the result of GDP per se but the loss of reliability [official] statistics, “says Saisuke Sakai, an economist at Mizuho Research and Technologies.

“We have no qualms about whether this issue could be resolved in government ministries,” Sakai said.

‘Stupid’

The study includes government policy and privacy policies that by 2020 amount to about $ 80 trillion ($ 700bn), and some are used to calculate GDP.

During the study, the ministry receives monthly orders from construction companies through local governments.

Companies that delayed shipping information usually send statistics for several months at a time, Asahi Shimbun said. In that case, the ministry would urge local officials to re-apply for an additional one-month period.

“The amount of GDP will not change much,” said Akiyoshi Takumori, an economist at Sumitomo Mitsui DS Asset Management.

Considering that Japan has hundreds of thousands of construction companies, the number of those affected is very small, he said.

“How much influence does he have? The kind of careless companies – who issue numbers late – are probably not big.”

Land Minister Tetsuo Saito, a member of the Komeito party – a smaller ally of the ruling coalition – confirmed the practice in parliament, calling it “extremely unfortunate”.

Asked about the incident, a senior government official said the land ministry had been told to “get a quick look” at the cause of the incident.

“We will be waiting for the results of this study,” Hirokazu Matsuno, the new secretary general, told a news conference after being asked whether previous GDP figures, monthly government fiscal reports or any other changes needed to be made.

The rewriting of the data, which could be illegal, continued until March, Asahi Shimbun said.