ADB ‘surprised’ over 4.1% growth claims
Manila-based lender projects growth rate for 2013-14 to be 3.4%, close to IMF’s estimates.
ISLAMABAD:
While the International Monetary Fund (IMF) remains mum over Pakistan’s latest official claim of achieving 4.3% growth, the Asian Development Bank (ADB) has expressed surprise over the high growth rate.
“Pakistan’s recorded growth in the fiscal year that ended in June [this year], which surprised on the high side at 4.1%, is above the Asian Development Outlook (ADO) 2014 forecast of 3.4%,” stated the ADO Supplement 2014 that the Manila-based lending agency released on Friday.
The figure quoted by ADB in its publication is based on information provided by the government in the Economic Survey of Pakistan. The lender will give its own judgment in September this year when it will release the ADO Updated report.
ADB’s comments highlight growing doubt over the credibility of official statistics. The lender had forecast 3.4% growth for fiscal year 2013-14 – close to the IMF’s projection of 3.3%. However, the government surprised independent economists and international lending agencies when it announced that the country achieved 4.1% growth in the previous fiscal.
The government later admitted the actual growth rate was 3.3% and not 4.1% in a policy document submitted to IMF.
When the discrepancy was highlighted, however, the government claimed the 3.3% figure mentioned in the document was a ‘typo’ and an ‘inadvertent oversight’. Instead, it insisted that the growth rate for 2013-14 was 4.3% – higher than the 4.1% growth rate it announced earlier.
In a press release, the government has claimed that a clarification has been issued to the IMF, asking it to consider the growth rate for 2013-14 as 4.3%.
Five days ago, The Express Tribune sent a set of questions to Jeffery Franks – IMF’s Washington-based mission chief for Pakistan – seeking his response to the government’s latest claims. While an aide to Franks acknowledged that she received the questions, the IMF did not respond any further till the filing of this report.
Franks was requested to comment on the official claims of an ‘inadvertent oversight’ and whether IMF staff will entertain any clarification in the Memorandum of Economic and Financial Policies (MEFP) that was approved by the lender’s board and will be the base for disbursement of a future loan tranche. The IMF mission chief was also asked whether its staff has the authority to accept the clarification without calling a board meeting and was there any precedent to amend the MEFP after it has been approved by the board.
Instead of responding to these questions, the IMF’s Resident Mission in Pakistan issued a message on its official Twitter account, IMF_Pakistan: “What a lot of nonsense in Pak press about GDP growth numbers! No one knew for sure 2013/14 growth until PBS publishes. No lying possible.”
“The language used by IMF in the tweet is shocking and indicates that its staff lacks manners while dealing with the press,” said Dr Ashfaque Hasan Khan, a former official of Ministry of Finance. He added that until the lender gave a proper response, the controversy over the growth figure will not end.
According to analysts, the main issue was not whether the country’s growth rate was 3.3% or 4.4%, but rather the credibility of the government. Independent economists, meanwhile, say even 4.3% growth is not sufficient to create jobs for tens of thousands young people entering the market every year.
Pakistan Tehreek-e-Insaf has already announced it will move a privilege motion against the government for concealing facts from Parliament.
Published in The Express Tribune, July 19th, 2014.
While the International Monetary Fund (IMF) remains mum over Pakistan’s latest official claim of achieving 4.3% growth, the Asian Development Bank (ADB) has expressed surprise over the high growth rate.
“Pakistan’s recorded growth in the fiscal year that ended in June [this year], which surprised on the high side at 4.1%, is above the Asian Development Outlook (ADO) 2014 forecast of 3.4%,” stated the ADO Supplement 2014 that the Manila-based lending agency released on Friday.
The figure quoted by ADB in its publication is based on information provided by the government in the Economic Survey of Pakistan. The lender will give its own judgment in September this year when it will release the ADO Updated report.
ADB’s comments highlight growing doubt over the credibility of official statistics. The lender had forecast 3.4% growth for fiscal year 2013-14 – close to the IMF’s projection of 3.3%. However, the government surprised independent economists and international lending agencies when it announced that the country achieved 4.1% growth in the previous fiscal.
The government later admitted the actual growth rate was 3.3% and not 4.1% in a policy document submitted to IMF.
When the discrepancy was highlighted, however, the government claimed the 3.3% figure mentioned in the document was a ‘typo’ and an ‘inadvertent oversight’. Instead, it insisted that the growth rate for 2013-14 was 4.3% – higher than the 4.1% growth rate it announced earlier.
In a press release, the government has claimed that a clarification has been issued to the IMF, asking it to consider the growth rate for 2013-14 as 4.3%.
Five days ago, The Express Tribune sent a set of questions to Jeffery Franks – IMF’s Washington-based mission chief for Pakistan – seeking his response to the government’s latest claims. While an aide to Franks acknowledged that she received the questions, the IMF did not respond any further till the filing of this report.
Franks was requested to comment on the official claims of an ‘inadvertent oversight’ and whether IMF staff will entertain any clarification in the Memorandum of Economic and Financial Policies (MEFP) that was approved by the lender’s board and will be the base for disbursement of a future loan tranche. The IMF mission chief was also asked whether its staff has the authority to accept the clarification without calling a board meeting and was there any precedent to amend the MEFP after it has been approved by the board.
Instead of responding to these questions, the IMF’s Resident Mission in Pakistan issued a message on its official Twitter account, IMF_Pakistan: “What a lot of nonsense in Pak press about GDP growth numbers! No one knew for sure 2013/14 growth until PBS publishes. No lying possible.”
“The language used by IMF in the tweet is shocking and indicates that its staff lacks manners while dealing with the press,” said Dr Ashfaque Hasan Khan, a former official of Ministry of Finance. He added that until the lender gave a proper response, the controversy over the growth figure will not end.
According to analysts, the main issue was not whether the country’s growth rate was 3.3% or 4.4%, but rather the credibility of the government. Independent economists, meanwhile, say even 4.3% growth is not sufficient to create jobs for tens of thousands young people entering the market every year.
Pakistan Tehreek-e-Insaf has already announced it will move a privilege motion against the government for concealing facts from Parliament.
Published in The Express Tribune, July 19th, 2014.