Used euphemistically to describe a person or statement that lies or deliberately withholds information. The expression comes from a statement given in evidence by Sir Robert Armstrong, British cabinet secretary, in the ‘Spycatcher’ trial (1986), conducted to prevent publication of a book by a former MI5 employee, ‘It contains a misleading impression, not a lie. It was being economical with the truth.’
The theological phrase economy of truth (i.e. sparing use of truth) is of long-standing, and was used by the 18th-century politician Edmund Burke.