GDP numbers

The national discourse on the latest GDP numbers doesn’t seem to be going anywhere. So far, it is limited to a war of words between the government and the opposition parties. The government is not clarifying the matter at all mainly because its spokespersons are not well-informed about the technical details of preparing the national accounts and GDP numbers. The latest evidence of this is the confused diatribe of the planning minister about the availability of ‘high frequency monthly data’, which, of course, is different from the national accounts. GDP numbers and the annual national accounts are prepared from the annual surveys of production and intermediate costs and from other annual data and should not be compared with reduced-form monthly data frameworks or derived from them. Clearly, in this matter, the government is at fault for a number of reasons: two years ago, it put a spanner in the works by giving the administrative control of the Pakistan Bureau of Statistics (PBS) to the Ministry of Planning and Development. It was wrong as this step clearly disregarded the UN’s fundamental principles of official statistics, which say that the national statistics agency should be independent of government influence. The PBS’ integrity is, therefore, compromised, since a user of the official statistics, the planning ministry, is also the producer of these statistics. Also, the government kept the PBS severely underfunded. It didn’t appoint a chief statistician for several years. This is why the national accounts and GDP numbers are based on ratios from old surveys. A lack of funds prevented the PBS from carrying out new surveys. It also doesn’t prepare independent estimates of GDP. The National Accounts Committee doesn’t have any reputable national accounts expert. As a result, we are witnessing a dismal state where GDP numbers may be produced as required.

The unfortunate truth is that neither the government nor the opposition parties will address these concerns. When the national accounts and GDP numbers are properly calculated, they draw attention to the fact how a few rich people, whom all major parties protect and nurture, appropriate almost all of the new wealth created in the country. Preparing proper official statistics is a serious matter and must be addressed accordingly. Our economic policy must distribute national wealth equitably.

Sarmad Khawaja

Islamabad