Controversial GDP number to undergo scrutiny

Published: May 1, 2012

Pakistan Bureau of Statistics’ move to shift base year sparks debate.

ISLAMABAD: The national accounts finalised by Pakistan Bureau of Statistics without approval of the competent authority and a controversial change in calculation methodology following input of a German consultant will be reviewed in the Governing Council of Pakistan Bureau of Statistics (PBS) meeting convened on May 4.

Pakistan Bureau of Statistics’ (PBS) move to shift the base year for calculation of the economy, from fiscal 1999-00 to 2005-06,  has created ripples in the power corridors as the exercise has not only resulted into revision of last five years all major economic indicators but also caused decreased the size of the economy by Rs2.5 trillion. Rebasing usually increases the size of the economy due to addition of new goods and services into the calculation.

The meeting of the Governing Council will be chaired by Finance Minister Dr Abdul Hafeez Shaikh, said sources familiar to the development.

PBS follows German consultant’s lead

Interviews carried out by The Express Tribune revealed that PBS did most of the work under guidelines of a German consultant, Bernd Struck. This is also evident from National Accounts Committee working paper that quotes “what we (PBS) are going to present is the result of about seven years input of Struck”. The official said PBS applied the German accounts model that was not applicable here

PBS rebased the economy without approval of the competent authority, said Rana Assad Amin, spokesperson for the Ministry of Finance. The government recently rebased the consumer price index which was approved by the Economic Coordination Committee of the Cabinet before putting it into play.

The PBS did not form an evaluation technical committee for reviewing the results of various studies and surveys. Though it claims carrying out 17 surveys and studies from 2006-2010 costing Rs283.5 million, the concerned ministries have not seen such studies and surveys.

Last time the economy was rebased, the government had carried out 223 studies which were widely debated in technical committees.

Statistics DG Arif Cheema has already announced in a press conference that the national accounts were final for him and the numbers would be defended in front of the governing council.

“The Secretary Statistics and DG PBS should have been suspended,” commented a senior government official while highlighting the gravity of the situation adding that the German consultant has also taken a flight back home despite having a contract till July.

The government has delayed Annual Plan Coordination Committee’s meeting, which convened on May 2 to recommend next year’s development budget and set key economic targets.

“Due to rebasing wide variations have been observed that need to be looked into as there is no consistency in data,” said Finance Minister Dr Abdul Hafeez Shaikh while talking to The Express Tribune. He strongly refuted that the ministry wanted to reopen the accounts just to jack up growth figure of the current fiscal year, estimated at 2.8% by PBS on the 2005-06 base year.

“It is a misconception that I or the Finance Ministry has asked the PBS to give economic growth figures according to our wishes, what the government wants is the transparency in the system,” he added.

Published in The Express Tribune, May 1st, 2012.

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Reader Comments (2)

  • ayesha_khan
    May 1, 2012 - 7:23PM

    Oh my God. a Statistics ministry actually takes a decision to rebase the economy based on advise by a German consultant without any approval or oversight from Finance ministry. Who is in charge in this country? Was the Finance ministry unaware of this project that seems to have gobe on for about 7 years?

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  • May 2, 2012 - 7:59AM

    @ayesha_khan: The BBC is reporting that there was a “statistical error in sugar production, which dragged down (India’s) January’s industrial production growth figure from 6.8% to 1.1%”.

    It’s not just any mistake, it’s a whopper!

    http://www.bbc.co.uk/news/world-asia-india-17891946

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