Rebasing of national accounts to be carried out

ISLAMABAD: The government has decided for moving ahead with rebasing of national accounts in order to balloon up the overall GDP growth figures for the current fiscal year 2021-22.

Through the re-basing exercise, the base year will be changed from the fiscal year 2005-6 to 2015-16 with an aim to capture data of various sectors of the national economy on a full-scale basis. It is also a fact that it will give only a good feel factor for the incumbent regime by displaying only jacked-up GDP growth figures.

The World Bank (WB) has validated the overall methodology for conducting the rebasing exercises in Pakistan and pointed out some deficiencies in respective areas, which could be rectified within the next few days.

The Pakistan Bureau of Statistics (PBS) is ready to present the re-basing of national accounts exercise before the high-powered technical committee, Governance Council and then Economic Coordination Committee of the Cabinet (ECC).

With this exercise, some key economic indicators will be improved but some will be further worsened. For instance, with the ballooning of GDP growth, total public debt in percentage of GDP will be improved. However, the FBR’s tax-to-GDP ratio may be worsened.

"We have accomplished 36 surveys/studies out of total assigned 42 exercises for changing the base year from 2005-06 to 2015-16 to calculate figures of national accounts as it will help ballooning the overall GDP growth rate in a substantial manner,” top official sources confirmed to The News.

“The re-basing of National Accounts will be accomplished within the current fiscal year and provisional GDP growth figure for 2021-22 will be calculated on the basis of rebasing exercise."

Top official sources said there are some practical difficulties in the way of rebasing of national accounts as the PBS conducted 42 studies on various sectors of the national economy to finalise weights on the basis of the latest data compiled in the fiscal year 2015-16. The PBS conducted different studies in the last four years. Earlier, such studies were conducted by consultants through the private sector but for the first time it was being done by the PBS itself, so the quality of the done studies needs to be thoroughly scrutinized before granting approval for rebasing of national accounts on the basis of 2015-16.

The last rebasing of national accounts was done in 2005-6 during the Musharraf/Shaukat Aziz regime. Earlier, the rebasing was done in 1999-2000 after a period of 20 years, so it was decided that the rebasing exercise would be done after five years. The economic census was also done in 2005-6 and the national accounts were re-based on the basis of the same data, so it was decided that the rebasing of national accounts should be done after a period of 10 years.

The PBS captured the data on the stipulated time-frame but for accomplishing all other requirements, it took almost four years for conducting other studies. Now it is hoped that the rebasing exercise will be implemented to change the base year from 2005-6 to 2015-16 because in 10 years, there are many ground realities changed. So fresh data capturing methodology should be devised to get a more realistic picture of the national economy.