Get the Latest News Updates

0.3% false economic growth rate

ISLAMABAD:
Pakistan’s economy shrank to $341.5 billion in the last fiscal year, and each person made only $1,568. This was due to almost no economic growth and a drop in the value of its currency. In light of this, there is a disagreement about the stated GDP growth number.

According to the estimates that the National Accounts Committee (NAC) accepted the day before, the economy shrunk by $34 billion, or 9%, and per capita income fell by $198, or 11.2%.

But some government sources and new information show that the Pakistan Bureau of Statistics (PBS) was under a lot of pressure to change the original estimate of a negative 0.5% growth rate for the last fiscal year, which ended on June 30.

The management of PBS gave in to the pressure and decided to show a nominally positive growth rate of 0.3%, the sources said. The figure was then printed by NAC.

The government told the world in the Post-Disaster Needs Assessment (PDNA) report about the floods of 2022 that “around one million livestock are estimated to have died.”

But the PBS said that only about 200,000 animals died in the last summer’s storms. This makes it hard to believe that both the government and the PBS are telling the truth.

The NAC agreed that the livestock grew by 3.8%, which shocked many people because the rate of growth before the flood was even higher than 2.3%. The obvious contradiction has also made it hard to believe that the official economic growth rate of 0.29 percent, which was passed by the NAC on Wednesday, is accurate.

The change from a negative growth rate to a positive growth rate seems to have been made quickly, and sources say that the PBS, the country’s national data collection agency, could not even give the NAC a good “working paper” for the first time.

The NAC accepted the provisional economic growth rate based on just one presentation, without even seeing the working paper.

Even so, the size of the economy and the income per person both went down in dollars during the last fiscal year. The size of the economy went down by 9%, or $33.9 billion, to $341.5 billion.

In terms of rupees, the size of the economy was nearly Rs85 trillion in 2022-23, which was about Rs18 trillion more than the previous fiscal year. This was because the country had a record inflation rate.

In the same way, the per capita income, which was thought to be $1,766 in the last fiscal year, fell to $1,568. This is a drop of $198, or 11.2%, per person. In terms of rupees, the average person’s income went from Rs313,337 in 2021-22 to Rs388,755 in 2022-23, which is a rise of one-fourth due to inflation.

Dr. Naeem ul Haq, who is in charge of statistics at PBS, said that he was not told to change the numbers. He didn’t answer when asked if it was true that the PBS had written working papers for NAC with negative 0.5% GDP growth for FY2022-23, but the papers weren’t given to the committee.

The top statistician also didn’t answer a question about what changed to make the growth rate go from negative 0.5% to positive 0.3%.

Dr. Naeem also didn’t answer the question about why the PBS didn’t give the working paper at the NAC meeting. He was also asked to say if the government had told him to change the number or face the repercussions. “It wasn’t right,” Dr. Naeem said.

But sources in the PBS and the Ministry of Planning said that the PBS management was under a lot of pressure to change the numbers.

A top government official denied that the Ministry of Finance put pressure on the PBS when they were asked about it. Instead, he said that the top statistician should be in charge of the whole thing.

Another government worker who is also accused of putting pressure on the PBS said that the Ministry of Finance only gave the PBS information and did not try to change how it did its job.

The farm, food, livestock, and fisheries sectors lost a total of $3.7 billion, according to the PDNA report. It also said that because of these losses, the local food processing and slaughtering businesses will be hurt by the expected decrease in food harvests and decrease in the number of animals available.

The study says that this will cause the value added by the industry sector to fall by 0.7% of GDP in FY22. But NAC agreed on Wednesday that the fishing sector grew by 1.44 percent, which is more than the 0.4% growth it had the year before, when floods hadn’t hurt it.

Even though the industrial sector has been going down, the industries that provide electricity, gas, and water have grown by more than 6%. The building sector is shown to have shrunk by 5.5%, which sources say is less than what the PBS first thought.

The government said that the education sector grew by 10.4%, which was the most ever since the previous high was 3.5% in 2017-18.

Also, it is said that health services have grown by 8.5%, which is even more than the 6.2% growth rate during Covid-19, when money was put into this area. The growth in the other services is higher than it was last year, which is strange because most of them have a set growth rate for the base year.

Overall, the agriculture industry is expected to grow by 1.6%, even though cotton production fell by 41.1%, cotton ginning fell by 23%, sugarcane only grew by 2.8%, and rice production fell by 21.5%.

The industrial sector is shown to have shrunk by 2.94 percent, which sources say is less than the negative output that was first predicted. Imports, important crops, and industry all went down by a lot, but the government says that the wholesale and retail sectors only went down by 4.5%.