Govt to finalise growth estimate for FY2020 by next week

ISLAMABAD: The government is expected to finalise the revised growth estimate for the outgoing fiscal year by next week – information that is much sought in the midst of the corona tumult that has upended almost all the economic sectors for the first time in history, people familiar with the matter said on Friday.

Sources said the government constituted a high-powered committee comprising representatives of the Ministry of Finance, Planning Commission, State Bank of Pakistan and Pakistan Institute of Development Economics (PIDE) and assigned them to finalise provisional growth figures for the outgoing fiscal year till Tuesday next.

The committee would assess methodology to estimate losses for various sectors in the post-COVID-19 pandemic for calculating the GDP growth, the sources said after a meeting of the National Accounts Committee (NAC) under the chairmanship of secretary planning. Growth stood at 3.3 percent during the last fiscal year of 2018/19. It was earlier projected at 2.4 percent for FY2020.

The International Monetary Fund and the World Bank projected negative growth of 1.5 percent for Pakistan for the current fiscal year. The central bank concurred with the projection. Revised estimate from the government is yet to arrive. Pakistan had witnessed negative growth of 1.8 percent in the fiscal year of 1951-52.

Sources said the NAC’s online meeting was informed that the GDP growth showed a negative figure. The Pakistan Bureau of Statistics (PBS) sought estimated figures of losses from respective ministries and attached departments and on the basis of available data, the growth figure was estimated to remain negative up to 1.3 percent calculated on the basis of data shared by the concerned departments.

Earlier, the PBS used to get data of the first eight to nine months and then averaged out estimated figure of the last quarter (April-June) period to calculate the provisional GDP growth figures, but this time in the post COVID-19 scenario, such calculation is not so simple.

The PBS preferred to get provisional data from the concerned ministries/departments that showed ballooning losses, making it hard for calculating the GDP growth in the post-corona situation.

The PIDE, an affiliate think tank of the Planning Commission, has estimated growth in the range of positive 0.6 percent to negative 1.3 percent for the current fiscal year. PIDE Vice Chancellor Nadeem Ul Haq, when contacted, said efforts are underway to calculate growth figures close to reality as much as possible. The COVID-19 scenario never appeared on the economic horizon of the country.

“The committee was constituted with the mandate to analyse methodology to assess the estimates of losses faced by different sectors of the economy in the last quarter of the current fiscal year,” said Haq, who attended the NAC meeting. “It is good for the purpose of transparency to deliberate everything before releasing any estimated figures.”

When asked about the high range from positive 0.6 percent to negative 1.3 percent, the renowned economist said there should always be a wide range, keeping in view the margin of error and methodology should be used for credible figures.

This scribe visited the office of PBS after the NAC meeting but no official was ready to say anything on the record. However, the sources said the NAC declined to finalise the GDP growth figures when certain objections were raised on certain points of methodology. The meeting finally decided to constitute the committee with a mandate to scrutinise and synchronise the entire data, the sources said.

The Annual Plan Coordination Committee (APCC), which is scheduled to meet on May 20, would consider approval of development outlay and macroeconomic framework for the outgoing and next fiscal year. The APCC will hold a virtual meeting to make working paper and forward its soft copy to the participants just one day ahead of the APCC meeting.