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GDP growth estimates of 2.37pc fudged: official - Naveed Yaseen - 05-17-2009 04:41 AM
By Khalid Mustafa
ISLAMABAD: The government has fudged the figures in an attempt to bring the reasonable GDP growth estimates of 2.37 per cent of ongoing fiscal close to the target of 2.5 per cent as agreed with International Monetary Fund.
If the government did not manoeuvre the figures, the GDP growth for current fiscal would be 0.5 per cent even if the cut in the size of GDP of fiscal 2007-08 by 1.7 per cent from 5.78 per cent to 4.1 per cent was acknowledged. And if the last year’s GDP of 5.78 per cent is kept as base, the GDP growth of the current fiscal must stand at -1 per cent, reveals the detailed investigation conducted by the News.
“The National Account Committee that met here on Saturday put its credibility on stake as it approved without any objection the working paper on GDP prepared by Federal Bureau of Statistics,” a senior official told The News.
For instance, the Federal Bureau of Statistics (FBS) did not include in the national accounts the growth in Large Scale Manufacturing of -7.7 per cent registered during July-March period, instead it included the growth of LSM registered during July-February period that stands at -5.7 per cent, the official said.
Moreover FBS included dubious figures of growth of major crops in GDP growth estimates for 2008-09. According to Planning Commission’s Annual Development Plan (ADP) for 2007-08, the major crops growth target was 4.5 per cent. Under the ADP, the target of wheat was earmarked at 24 million tonnes, rice 5.7 million tonnes, sugarcane 56.5 million tonnes and cotton 14.1 million bales.
But in the working paper prepared by FBS which NAC approved, it has been shown that rice produce in the ongoing fiscal has been estimated at 6.96 million tonnes as against target of 5.7 million tonnes; but wheat produce estimates have reduced to 23.4 million tonnes against target 24 million tonnes, cotton 11.8 against 14.1 million bales and sugarcane 50 million tonnes against 56.5 million tonnes.
However, the working paper of FBS shows that major crops growth has increased to 7.7 percent despite the decline in growth of three major crops as against the target of 4.5 percent.
If the real picture of the major crops is accounted for, the agriculture growth stands at 2.7 per cent and if the LSM growth of -7.7 per cent in July-March period and agriculture growth of 2.7 per cent is included in the national accounts the GDP growth of country for the ongoing fiscal stands at 0.5 per cent.
Advisor to Prime Minister on Finance Shaukat Tarin when contacted for comments over the massive reduction in last year’s GDP growth from 5.78 per cent to 4.1 per cent by FBS and NAC and not including the LSM growth in July-March period in national accounts and inclusion of faulty major crops figures in national accounts, he said: “Let me find out as to what has been approved by National Accounts Committee and then I will come to you for comments for response.”
When he was informed that the NAC approved the working paper of FBS as it is, of which the copy is available with The News, he said it is quite alarming if it happened so.
However, latter The News tried again and again for comments but his cell phone was found powered off.
The official who attended the NAC meeting said that the FBS has also took a dubious decision to drastically reduce the last year GDP growth by 1.7 percent from 5.78 percent to 4.1 percent.
The official said for last 10 years it never happened that growth of last year has drastically been adjusted downward. “The said decision has been apparently taken to reduce the base so that the GDP for current fiscal could be shown at reasonable level closed to 2.5 percent GDP target.”
In 2006-07, the provisional growth was at 7 percent, which got later revised at 6.8 per cent and finalized also at 6.8 per cent. However, the provisional GDP growth for 2007-08 was calculated at 5.78 per cent, which has been finalized by National Accounts Committee at 4.1 percent.
The official also disclosed that one of the participants objected on non-inclusion of LSM growth till March which is of -7.7 per cent, but the FBS official said that the month of March was abnormal because of the Long March activities so the growth in March was not included knowing the fact that whole current fiscal remained the abnormal year but it did not mean the abnormal months and year should not be includes in national accounts.
Head of the National Accounts Wing in FBS could not be contacted for comments despite many attempts.
http://www.thenews.com.pk/daily_detail.asp?id=177982