Editorial
The Pakistan Bureau of Statistics (PBS) has recently estimated the Gross Domestic Product (GDP) growth rate for the current year to be 2.38 per cent, with significant and frequent revisions in the growth rates of different quarters. The third-quarter growth rate was revised to 2.09 percent, while the growth rate for July-September was adjusted to 2.71 percent from the original estimate of 2.5 percent. Additionally, the second quarter saw a revision from 1 percent to 1.79 percent. These revisions underscore the volatility of the estimates and the need for more reliable data.
When considering the original estimates for the three quarters, the nine-month growth rate stands at 1.8 percent. Achieving the projected annual growth rate of 2.38 percent would necessitate a substantial 3.9 percent growth in the last quarter, which seems highly improbable. However, with the upward revisions, the last quarter would need to register a more feasible 2.72 percent growth to meet the annual growth projection.
The upward revisions in the growth rates for the first two quarters raise concerns, evoking memories of the downgrading of 2012’s growth rate two years later. This prompts questions about the accuracy and reliability of the data, especially considering it is the first year that PBS has calculated quarterly GDP growth statistics. It is possible that the underestimation is due to a lack of experience and expertise.
Furthermore, the PBS has been facing credibility issues from independent economists who have challenged the accuracy of inflation figures. They argue that the computation method for inflation does not accurately reflect the true inflation rate, leading to a lack of confidence among the general public. These concerns are not just academic, but have real-world implications, as they can undermine the public’s trust in the economy. These concerns are further exacerbated by discrepancies in the calculation of electricity tariffs and the inclusion of subsidised rates in essential goods, which may not always be available.
The PBS attributes the upward revision of growth in the first and second quarters to substantial growth in mining and quarrying, which nearly doubled in the first quarter and witnessed positive changes in the second quarter. However, there is a lack of clarity and justification regarding the specific factors driving these revisions. This lack of transparency can undermine the credibility of the data and the confidence of the public. Additionally, the decline in electricity, gas, and water supply has not only impacted output but also the quality of life for the general public.
Given these challenges, it is crucial for the PBS to provide accurate and reliable data. This data is not just for academic purposes, but it is the foundation for informed decision-making by policymakers. The pressure on statistical gathering departments to present overly optimistic data, likely influenced by political agendas, has the potential to mislead leaders and the public alike. Therefore, ensuring the accuracy and transparency of economic data is essential for fostering trust and confidence in the country’s economic performance.
