The euphemistic phrase to be economical with (or of) (the) truth means: to deceive people by deliberately not telling them the whole truth about something.

This phrase is particularly associated with the ‘Spycatcher’ trial in the Supreme Court of New South Wales, Australia, in 1986, in which the British Government was attempting to prevent the publication of the memoirs of a former MI5 agent, Peter Wright (1916-1995). Giving evidence at the trial, Robert Armstrong (1927-2020), then Cabinet Secretary and head of the British Civil Service, referred to a letter cited as evidence in the following terms: “It contains a misleading impression, not a lie. It was being economical with the truth.”

The following details are from The Daily Telegraph (London, England) of Wednesday 19^th November 1986 [No. 40,873, page 3, column 1]—Malcolm Turnbull (born 1954) later served as the 29^th Prime Minister of Australia (2015-18):

‘Being economical with the truth’
Head of Civil Service accused of telling lie
By Trevor Fishlock in Sydney

SIR ROBERT Armstrong, the Cabinet Secretary and head of the Civil Service, admitted to the MI5 spy book hearing in Sydney yesterday that he had been “economical with the truth” in dealing with a publisher.
The British Government’s chief witness, he came under strong and searching attack when he began what promises to be a gruelling cross-examination duel with Mr Malcolm Turnbull, solicitor for Mr Peter Wright who is fighting attempts to suppress his book “Spycatcher.”
Sir Robert was asked how highly he valued telling the truth and replied: “Very highly.”
He was then reminded of a letter he wrote to Mr William Armstrong, chairman of Sidgwick and Jackson, publishers of Mr Chapman Pincher’s book “Their Trade was Treachery.” The letter asked for two advance copies and said they would be useful to Mrs Thatcher, who would have to make a statement in the Commons.
Mr Turnbull said the letter was a calculated attempt to mislead because it gave the impression that the government did not have the book. In reality it already had page proofs. Sir Robert said his letter was fashioned to conceal this, in order to protect the source.
“The letter contains a lie,” Mr Turnbull said.
“It contains a misleading impression, not a lie. It was being economical with the truth. If that was misrepresenting the facts, it was misrepresentation. It was to protect the source,” said Sir Robert.

Note: It was in reference to Robert Armstrong’s use of the phrase to be economical with the truth that the British politician Alan Clark coined the variant to be economical with the actualité in 1992, during the ‘Matrix Churchill’ trial in London—cf. ‘to be economical with the actualité’: meaning and origin.

The notion of being sparing or careful with the truth had already occurred in Two Letters Addressed to a Member of the Present Parliament, on the Proposals for Peace with the Regicide Directory of France (London: Printed for F. and C. Rivington, 1796), by the Anglo-Irish statesman and political philosopher Edmund Burke (1729-1797):

[page 137] In this crisis I must hold my tongue, or I must speak with freedom. Falshood and delusion are allowed in no case whatever: But, as in the exercise of all the virtues, there is an œconomy of truth. It is a sort of temperance, by which a man speaks truth with measure that he may speak it the longer.

The earliest occurrences of the phrase to be economical with (or of) (the) truth that I have found are as follows, in chronological order:

1-: From The Constitution; Or, Cork Advertiser (Cork, County Cork, Ireland) of Tuesday 10^th April 1832 [Vol. 11, No. 1,569, page 2, column 5]—Daniel O’Connell (1775-1847), ‘the Liberator’, was the first great 19^th-century Irish nationalist leader:

MR. LAWLESS’ LETTER.

The Liberator was prolix to an excess at the last assemblage of the National Political Union in Dublin. His revolutionary vagrancy had ended substantially—Lawless had been demolished, politically, for ever—and there was time, to threaten, and promise, and to tell as many lies as might prosper the cause in hands—and the greatest use was made of the opportunity. The oration which the Reporters, who wait the Liberator’s commands and execute them, have prepared for us, is an olla podrida of all the elements of sedition. It is stuffed with them—but a more temperate seasoning would not have been acceptable to the palates of the surrounding Members of his Pandemonium. If he was profuse of reproach, he was peculiarly economical of truth, especially when he had the impudence to say—“I have seen 25,000 men around men in Cork; I had as a body guard men who were Orangemen.” If he meant by this that actual Orangemen of the present day, were of his procession, at all, there is no truth in him; although an individual Orangeman belonging to one of the Trades, might be forced by his Roman Catholic fellow-workmen, without, by his yielding, paying respect to Mr. O’Connell or his faction.

2-: From the Macon Georgia Telegraph (Macon, Georgia, USA) of Thursday 29^th September 1836 [Vol. 10, No. 66 [?], page 3, column 3]:

If Gabriel Capers expects to divert attention from the odium of his being a subscriber to an incendiary newspaper, and from the offence of openly exhibiting such newspaper at a public gathering in this county, by an unwarrantable attack upon the editor of this paper, he will fail in his expectation. The facts of which he stands accused by Q. in the Telegraph of the 15^th he does not deny, and cannot palliate. How does the Reverend gentlemen [sic] endeavor to get out of the dilemma? By making a solemn preamble about the moral right of holding slaves, &c. (which nobody in this community controverts,) and by giving a lecture on decency and moral rectitude! (God save the mark!)—Unless the gentleman becomes less economical of Truth, we opine his labors as a missionary in the cause of Nullification will be as unprofitable as they were in the cause of Religion.

3-: From The Clonmel Herald (Clonmel, County Tipperary, Ireland) of Saturday 10^th June 1837 [Vol. 36, No. 3,711, page 3, column 3]:

About four o’clock on last Sunday evening a very unpleasant circumstance took place, in that sink of corruption, Sherlock’s lane, in this town; two Artillerymen having gone into an improper house, they were followed by the Rev. John Power, one of the R.C.C. of this town, who desired them to quit the place; one of them had the good sense to go away, but the other refused, alleging that he (the Rev. gentleman) had no right to interfere with him; a wordy altercation then commenced between them, but the Rev. gentleman succeeded in getting out the soldier […]. The conduct of the Rev. gentleman was highly proper in endeavouring to get visitors out of this impure place; and to prevent such an awful desecration of the Sabbath; and because he did so he is menaced with castigation by that inventor of falsehoods, the Tipperary Constitution.—Every man possessed of high moral and honorable feelings must despise that zeal—for pelf—which denies justice to a political adversary, who courts danger and obloquy in defence of religion; but our inventing contemporary appears to be very economic of truth on such occasions, which, it may be supposed, it considers as wind-falls.

4-: From a response to the Wyoming Republican and Farmer’s Herald (Kingston, Pennsylvania, USA), which, on Wednesday 25^th October 1837, wrote that The Advocate had quoted a Chinese edict and recommended the adoption of a similar one by the U.S. Government—response published in The Advocate (Wilkes-Barre, Pennsylvania, USA) of Wednesday 1^st November 1837 [Vol. 1, No. 4, page 2, column 5]:

We did not recommend the adoption of a similar edict by our Government […] We […] have not said what the Republican imputes to us, and think it would act correctly to unprint the paragraph so economical of truth.

5-: From Parliamentary Proceedings, published in The Freeman’s Journal. And Daily Commercial Advertiser (Dublin, County Dublin, Ireland) of Friday 27^th July 1838 [Vol. 73, page 2, column 2]:

The Most Noble the Marquis of Westmeath feels (and naturally, we admit) very anxious to know the result of the investigation instituted some few weeks ago into the conduct of Mr. Shiel by the Irish executive. In moving for the minutes of evidence the noble marquis gave a revised though, it would appear, from the speech of Lord Plunket, not a corrected edition of the transaction complained of. If we mistake not, Mr. Shiel invited, nay, challenged, Lord Westmeath to attend the inquiry at Mullingar, and substantiate the charges his lordship urged in another place. He thought proper, however, to decline the invitation, and the consequence is that the country will be put to the expense of printing an immense body of evidence for the exclusive use and benefit of the noble lord. His lordship, however, notwithstanding that he succeeded in obtaining an order for the minutes, made but little by his motion. Lord Plunket showed pretty clearly that, throughout the entire of the speech which Lord Westmeath inflicted on the house, the speaker was peculiarly economical of truth.