The ruling Liberal Democratic Party will form a group by the end of the month to examine how to best collect and compile economic statistics that are used in key measures including gross domestic product, party lawmaker Yoshimasa Hayashi said.
Hayashi, 55, added that he will chair the group and that any changes to the data are likely to result in stronger — not weaker — figures.
“We need to get the overall GDP numbers, including both consumption and business spending, a bit closer to reality,” said Hayashi, who has previously been involved in overseeing the figures at the Cabinet Office.
“We’re going to create a project team within the Policy Affairs Research Council to look at this,” he said in an interview Thursday.
Governments and investors around the world are increasingly questioning the accuracy of GDP as a yardstick for economic health as it struggles to keep pace with rapid social and technological change. What’s more, the differences between preliminary and revised figures in Japan have been enough to shift perceptions of the economy from recession to growth.
Japan will release revised GDP for the second quarter next Thursday. An initial reading on Aug. 15 suggested that the economy expanded by an annualized 0.2 percent during the period.
Hayashi’s group will have wide scope, examining broad economic trends, such as how to capture digital economic activity in official data and the shift in business investment from tangible assets to intangible ones. He said issues such as the sampling for the household spending survey may be examined.
When Prime Minister Shinzo Abe came to power at the end of 2012, he pledged to implement policies to help the country escape persistent deflation and boost growth. Now, 3½ years later, prices are falling again and consistent economic growth remains out of reach. Changing the process for calculating GDP as foreshadowed by Hayashi could help Abe get closer to his goal of a ¥600 trillion economy by 2020.
When asked about the likely outcome of the data reassessment he’ll lead, Hayashi said: “There’s certainly no way it would be revised down.”
The Bank of Japan in July published independent calculations of GDP, which showed in 2014 the economy actually grew ¥29.5 trillion — more than the official data from the Cabinet Office showed.
“We use GDP in deciding on the consumption tax, our fiscal adjustment target, and many other economic policies,” Hayashi said. “We should get this as close to the real economy as possible, as fast as possible.”
The group’s first meeting will probably be around the start of the fall session of the Diet, and it will aim to produce a policy proposal by the end of the year, he said.