The Economic Planning Agency said Thursday it will likely slice its gross domestic product data for the October-December quarter of 1999 to around minus 1.6 percent from a preliminary figure of minus 1.4 percent.
The announcement followed a New York Times report that the EPA had not taken into account some unfavorable data when compiling the May figure.
The daily said the EPA appears to have given in to pressure from the ruling Liberal Democratic Party and other political forces before the general election in late June.
It also said the statistical manipulation by the EPA will lead many observers to question the overall accuracy of statistics released by Japanese government ministries and agencies.
Akira Sadahiro, chief of the Economic Research Institute, rebutted the allegations, saying there was no political intention behind the May figure.
“The agency is taking the (corrective) step because it has taken into consideration the fact that some of the statistical components have undergone the sort of fluctuations never seen in the past,” the EPA research arm’s top man said.
He went on to say that EPA number-crunchers could not explain the “fluctuation” and believed it was their “duty” not to include the data without confirming it.
The preliminary real GDP data, adjusted for inflation and seasonal variations, was announced March 13 and affirmed May 11, when the EPA released its second batch of GDP statistics. GDP is the total value of goods and services produced domestically.
The revised GDP growth rate will be released around June 10 together with the preliminary data for January-March 2000.
Sadahiro said the revised figure will probably show that the real degree of economic contraction in October-December was sharper than the figure announced May 11.
The preliminary and affirmed figure of minus 1.4 percent was the second consecutive quarter of negative growth, putting the economy back into a technical recession.
Economists say that with the revised figure, expected to be negative 1.6 percent, the government will have a difficult task if it is to attain its goal of 0.6 percent growth for all of fiscal 1999.
Vice Finance Minister Nobuaki Usui, however, said the downward revision does not indicate a change in the economy’s recent “recovery trend.”
“Even if the figure is to be rectified, there would be no need to worry about the economy’s upward trend or momentum,” he told reporters.
The omitted data show financial institutions slashing their spending on new equipment by 37.7 percent, an unprecedentedly large revision from original estimates of a three percent fall.
After the downward revision, the government will be able to achieve its target of a real 0.6 percent growth for fiscal 1999 only if the economy grew by a robust 2.4 percent in January-March 2000.
A recent Reuters survey of 23 economists put fourth quarter GDP at 2.1 percent, which would barely put the economy over the goal of 0.6 percent if the original numbers were accurate.