Absence of full LSM data to blur GDP figure

ZAHEER ABBASI

ISLAMABAD: The government’s ability to present a realistic budget on April 27, the date scheduled by Special Advisor to the Prime Minister on Finance, Revenue and Economic Affairs Dr Miftah Ismail, may not be possible with only seven-month data for large-scale manufacturing available that would make it difficult for Finance and Planning to work out a credible GDP figure.

There is a lag in quantum index of (large-scale) manufacturing (QIM) data collection as provinces make this data available to Pakistan Bureau of Statistics two months later, informed sources revealed to this correspondent.

The government had projected a 6 percent GDP growth for the current fiscal year on the basis of 5.4 percent growth in agriculture sector, 6.4 percent in large scale manufacturing as well as 6.4 percent in services sector and variation in growth of any of these sectors will impact on growth outlook for the current fiscal year.

Sources said the real challenge for the government is the availability of large scale manufacturing data for the first nine months of the current fiscal year due to lag of two months in its finalization. They added that LSM data of July-February will be ready by end April 2018 and “if the government presents budget on April 27, it has to rely on calculating final growth figure for the current fiscal year on LSM data for seven months instead of nine months considered acceptable by past governments.

Sources, however, expressed concern that the government may rely on seven months QIM data but in such an eventuality the credibility of projections, already being questioned by independent economists, would be further eroded. Large scale manufacturing growth is one of the major constituents of GDP growth.

Sources added the latest indications coming from provinces point towards slippages in production and growth of agriculture on account of lower than expected production in two major crops– wheat and sugar. A shortfall of one million tons is expected in production of wheat crop in Punjab and half a million in Sindh. The government has convened a meeting of Federal Committee on Agriculture (FCA) on April 10 to take stock of the situation of various crops and assess production of the sector for the current fiscal year and fix targets for next season’s crops.

The meeting chaired by the federal minister for agriculture and attended by officials of provincial agriculture departments will assess production targets of major and minor cash crops with targets set in the budget to achieve a GDP growth of 6 percent.

The assessment of FCA will then also be shared with national accounts committee to review the budget targets for the current fiscal year and project targets of industrial and agriculture sectors for next fiscal year.

Sources in the Finance Ministry, however, stated that “Ministry will stick to the date announced by the advisor”. They added there will be no issue of availability of data of services and agriculture sectors and the government can use QIM data of seven months instead of nine months for making projections.