ISLAMABAD: Former minister for finance Dr Hafeez A Pasha has raised different objections over the calculation of GDP growth figures and said that the last fiscal year growth was finalised at negative 0.47 percent but actually it had gone down to negative 2.1 percent mainly because of massive contraction witnessed by the economy in the last quarter (April-June) period in 2019-20.
He said that the net GDP growth effect in the last two fiscal years, including 2019-20 and 2020-21, stood at 1.8 percent only against average population growth of 2.4 percent on per annum basis in Pakistan, arguing that the net real income witnessed a decrease, so it was the reason that the people of Pakistan were feeling pinch in their daily lives.
“The Pakistan Bureau of Statistics (PBS) needs to be strengthened, so that they could calculate official figures accurately. There are various issues related to growth estimation mechanism in order to look it in-depth and rectify the situation,” Hafeez A Pasha claimed while talking to The News on Monday.
He said that he raised objections on the basis of research and was ready to sit with the government to contest their GDP growth estimates. When asked to share further details about the raised objections, he said that the GDP growth figure of the last fiscal year that was provisionally estimated at negative 0.38 percent was now finalized at negative 0.47 percent. It was a wrong calculation as his research showed that the manufacturing index shrank by negative 24 percent, exports faced negative growth of 34 percent and the overall economic activities were halted negatively in the last quarter (April-June) period of 2019-20 because of eruption of Covid-19 pandemic. The PBS, he said, did not calculate the impact of last quarter on the GDP growth accurately for finalising the growth figures of negative 0.47 percent for 2019-20, so it needs ratification.
About the GDP growth figures of 3.94 percent for the current fiscal year, Dr Pasha said that the federal cabinet had approved the GDP growth forecast at 2.9 percent a few weeks ago under the Budget Strategy Paper (BSP). This Budget Strategy Paper, he said, was prepared in consultation with the IMF, so within two weeks the GDP growth figure was jacked up from 2.9 percent to 3.94 percent. He said if one agrees with the provisional GDP growth of 3.94 percent for the outgoing fiscal year, still he could not believe in finalized GDP growth at negative 0.47 percent for the previous fiscal year 2019-20. In real terms, the net income of the country decreased because the net GDP growth stood at 1.8 percent on an average in the last two fiscal years but the country’s population growth went up by 2.4 percent, so people of Pakistan were experiencing severe economic difficulties in their daily lives.
This scribe contacted Special Assistant to PM on Finance and Revenues Dr Waqar Masood who said that it was a highly wrong assertion that any effort was made to distort the figures. He said the major crops, including wheat, maize, rice and sugarcane, witnessed an impressive growth and then Large Scale Manufacturing (LSM) was achieving higher growth trajectory on monthly basis, so the GDP growth went up. He asked who had given authority to any individual to raise objections without having any basis.
Former chief economist and renowned economist Dr Rashid Amjad, who is also part of high profile Economic Advisory Council (EAC), told this scribe that there was no reason to raise hue and cry over the GDP growth rate of 3.94 percent as it was on the higher side compared to other regional economies after witnessing negative impact of Covid-19 pandemic. However, he said that Pakistan’s growth rate was not balanced and real wages of labourers were quite low in the country. He was of the view that the PBS does not listen to wishes and whims of any one, so there was a need to scrutinize methodology adopted by the PBS if anyone possessed any doubts about the growth figures. The PBS took population figures of 1998 to calculate the per capita income. When contacted, top official sources said that the PBS did not take population census results of 2017 because the National Institute of Population Studies (NIPS) required time-frame of six months to calculate different figures, such as fertility rate and other population indicators, then the whole series of per capita income would be adjusted accordingly. However, it is true that almost nine million people existed among the population but they are missing from the per capita income. If the population census 2017 gets implemented, then the per capita income in dollar terms will decline close to $1,200 per person in Pakistan.
