ISLAMABAD, May 4: Finance Minister Dr Abdul Hafeez Shaikh prevailed upon the Pakistan Bureau of Statistics (PBS) on Friday to revise growth figures.
The PBS had on April 26 projected the economic growth at 3.2 per cent which was below the finance minister’s estimate of four per cent.
At the same time, the base year for calculation of national accounts has been changed from 1999-2000 to 2005-06 to depict the actual performance of economy and variables.
Dr Hafeez was in Washington at the time of these calculations of trends in Pakistan’s economy and shared with donors his estimates about the growth in various indicators. Since then the revision has created ripples in the corridors of power. On Friday, the recently-constituted PBS governing council headed by Dr Hafeez Shaikh asked for recalculation of national accounts on the basis of the old base year, apparently to show feel good figures for the embattled government.
PBS secretary Sohail Ahmad, who is also chief statistician, admitted that announcing the growth figures on the basis of the revised base year was his mistake.
“It was my mistake that I have not presented the new calculations to the governing council before making them public,” he said, adding it was mandatory to seek the governing council’s approval.
The change in base years should be made every five to seven years, but Mr Ahmad said it required proper consultations with all stakeholders. “The PBS officials are not authorised to change the structure of the whole economy without having a say from the stakeholders,” he said while justifying the revision in growth figures.
On April 26, the PBS secretary was jubilant to have taken a landmark decision to change the base year with the help of a German consultant. But a week later, he said he was not aware that the governing council had not been informed about the change. “I was posted in the PBS in January and was not aware of the working of the organisation,” Sohail Ahmad said, adding that his team was now working on calculating new growth figures on the basis of the old base year. The revised figures about production and agricultural yields in May will also lead to changes in the trend in indicators.
He said the budget would be based on the new figures which would be finalised next week. It will be presented to the National Economic Council headed by the prime minister.
However, the PBS secretary said a meeting of the governing council appreciated the rebasing for calculation of economy which would make the system more advanced and on a par with the international system. But at the same time, he said, the meeting asked for a comprehensive working on the rebasing year which would automatically delay the process for another one year.
An official statement issued after the meeting said the council discussed the recently-conducted national accounts rebasing exercise. Members expressed concern over the methodology, quality of primary data on various sectors of economy, analytical framework and restructuring steps taken by the PBS to adjust GDP of the past 10 years.
They also pointed out inadequate consultations with stakeholders, including academia and multilaterals, on technical aspects before taking the rebasing data to the National Accounts Committee as was done during the previous rebasing exercise.
They asked the PBS to prepare a comprehensive background paper highlighting the logic for rebasing, process adopted including discussions with various stakeholders, methodology including measures taken to rebase the data, changes in key macroeconomic variables by sector and year because of the rebasing and their explanations and comparison of data of old series of pre-1999-2000 rebasing with that of 2005-06. The meeting was informed that the process would take four weeks.