Government delays releasing growth figure

PBS blames development on provinces, speculation persists .

ISLAMABAD:

The government has delayed releasing the final economic growth rate figure of the last financial year amid speculation that the decision has been taken to avoid its impact on the upcoming capital market transactions and issuance of $1-billion Sukuk bonds.

According to a policy decision of the Pakistan Bureau of Statistics’ (PBS) governing council, the economic growth rate for the fiscal year 2013-14 was to be released on the first working day of October. Finance Minister Ishaq Dar had also assured that the figure would be released not later than September 30.

However, when contacted, PBS Chief Statistician Asif Bajwa blamed the provinces for the delay. He said the federating units have not provided the requisite data that caused the delay. He did not give a new date for the release.

Contrary to Bajwa’s assertion, a senior member of the PBS, second in hierarchy, told The Express Tribune earlier on Tuesday that the figure was ready and could be released any time. However, he changed his stance on Wednesday and insisted that the provinces did not share the data.

Controversy rife

The economic growth rate of the last fiscal year has become controversial.

Publicly, the government has maintained that the growth in 2013-14 stood at 4.1%. The figure was announced as the preliminary growth rate for the previous fiscal year and published in the Economic Survey of Pakistan 2013-14 as well as the State Bank of Pakistan’s (SBP) quarterly report.

Independent statisticians and economists, including Dr Ashfaque Hasan Khan and former finance minister Dr Hafiz Pasha, have questioned the provisional growth rate, as they have worked the growth rate to be below 3.5% based on the official data.

The government had also admitted to the International Monetary Fund that the growth rate for the previous fiscal year was expected to be around 3.3%.

“We now expect that the GDP will expand by about 3.3% in fiscal year 2013-14,” the government stated in the Memorandum of Economic and Financial Policies (MEFP) which it submitted to the international lender on June 19.

However, when the issue was highlighted in the press, the government claimed that it was a typing mistake.

It is not for the first time that the government has withheld the release of GDP figures. Earlier, it delayed the release of second quarter (October-December) growth figures as the release was coinciding with issuance of Euro bonds.

Sources said that the government was applying the same tactic again. The release was coinciding with upcoming capital market transaction of Oil and Gas Development Company (OGDCL). The government has planned to issue over 7% stakes of the state-owned company at London Stock Exchange to raise about $850 million. The transaction is expected to be closed within the first half of this month.

In the second half of the month, the government has planned to issue $1-billion Sukuk bonds. Both transactions are critical for the government to build reserves that have started declining again.

For the last financial year, the government’s growth target was 4.4% while international financial institutions, excluding World Bank, had projected the growth in the range of 3.1% to 3.4%.

Sources said the growth rate was expected below 4% and the government feared that it could increase the cost of borrowings.

Published in The Express Tribune, October 2^nd, 2014.

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