Fudging GDP growth.

GDP growth target is fixed by the Planning Commission (PC). This makes it an interested party in showing best results. Pakistan Bureau of Statistics (PBS) collects data on various sectors and economic activities, and presents whatever is the total value added during the year as GDP growth. It has no interest in the outcome. The focus is on using a consistent and generally acceptable methodology in a transparent and accountable manner. There is a clear-cut conflict of institutional interest. This is why I warned against placing the PBS under the PC (February 15, 2019).

However, in a country where judges of superior judiciary tend to ignore conflict of interest in bench formation, institutional conflict of interest hardly matters. The PBS is now an attached department of PC. National Accounts Committee (NAC), the forum for the approval of the estimates made by the PBS, is now headed by the Planning Secretary. This state of the affairs is worse than the beginnings in 1950, when both planning and statistics were the attached departments of the then Ministry of Economic Affairs.

What happened in the last week of May was nothing new. But the way and the speed with which it happened left no doubt about the driver. Everyone in Pakistan and those interested abroad knew ahead of time that growth in Pakistan was likely to be negligible, if not negative. Large scale manufacturing, important crops and the related wholesale and retail trade are the only sectors where data is available before the end of the year for provisional or first estimates. The rest is based on projections or extrapolation of past survey results and other indirect methods. In FY23, the three main sources of direct information are deep in the red.

Obviously, the PBS came out with an overall growth of minus 0.5%, still an underestimate in my view. Alarm bells rang first in...