Photo/Illutration Prime Minister Fumio Kishida speaks at the Jan. 31 Lower House Budget Committee meeting on the infrastructure ministry’s “double counting” of construction contracts. Behind him is infrastructure minister Tetsuo Saito. (Koichi Ueda)

Prime Minister Fumio Kishida on Jan. 31 declined to commit to a recalculation of gross domestic product despite suspicions that the key economic statistic was inflated through data falsified by the infrastructure ministry.

“I will refrain from saying anything about the recalculation at this stage,” Kishida said at a Lower House Budget Committee meeting in response to a question by Takashi Kii, a lawmaker with the main opposition Constitutional Democratic Party of Japan.

Kii called on the government to make a fresh calculation of GDP and determine the total inflated amount caused by the “double counting” of construction contracts.

Recent calculations by The Asahi Shimbun showed that GDP was increased by about 4 trillion yen ($35 billion) in fiscal 2020 due to the double counting of construction contract figures as ordered by ministry officials.

The value of construction contracts is one of the statistics used to calculate GDP. The government takes into account GDP figures when it compiles budgets.

The government has repeated its stance that the inflated value had only a “minor” effect on GDP numbers.

Yosuke Takada, a senior official at the infrastructure ministry who is involved in policy planning and coordination, told the session that the growth rate in the value of construction contracts, not their overall value, is used for GDP calculations. 

He said the effect on GDP is considered “minor” because the growth rate is calculated from data for the current and preceding periods that both include inflated figures. Therefore, any effects from double counting cancel out each other when the rate of change between the two periods is calculated. 

When asked how much the value of construction contracts was increased, infrastructure minister Tetsuo Saito said only that the government will restore appropriate data to revise the faulty figures at an early date.

In reply to their answers, Kii said, “It is impossible to dismiss the effect as ‘minor’ because it has yet to be substantiated by accurate statistics.”

The ministry held a review meeting on Jan. 25 with statistic experts on how to “restore” the correct figures.

At the Budget Committee session on Jan. 31, Kishida said he will order members of the review meeting to accelerate their discussions.

The ministry expects to compile a report on how it will restore the correct contract figures by the middle of May. The ministry will likely need additional months to revise past figures based on the adopted calculation method.

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