ISLAMABAD: Owing to the improved performance of industrial and services sectors, Pakistan is aiming to achieve approximately 6% gross domestic product (GDP) growth for the current fiscal year,
While the differences between the Ministry of Finance and the Ministry of Planning and Development over the evaluation of provisional GDP linger on, the government is expected to calculate the GDP growth currently in the range of 5.7% to 6.2% for this FY.
The country’s history of witnessing a boom and bust cycle is going to repeat as Pakistan’s GDP growth ranges around 6%, while the macroeconomic imbalances on account of budget and current account deficits re-surfaced.
Meanwhile, the Pakistan Bureau of Statistics (PBS) is allegedly being urged to adopt a conservative approach. However, it has so far refused to accommodate the demand, contending that changing methodology would mar credibility of official data.
One top official said the previous government had pressurised the PBS to bring changes in the price data to show less inflation, but it had refused to change the methodology for the collection of the pricing data.
Now again, the PBS should refuse to accept any pressures for data manipulations, said an official working with the Ministry of Finance. He argued that the data should be reflective of ground realities as no one would believe that the country was achieving a higher growth trajectory. But the official data and empirical evidence showed that whenever the country achieved higher GDP growth, it resulted in surfacing the twin deficits, so it was happening again.
Official sources said the government was projecting a budget deficit of over Rs5 trillion and a current account deficit of $16-$17 billion. The Ministry of Finance’s economic advisory wing has estimated that the provisional GDP growth might be touching 4.2% for 2021-22. However, the Ministry of Planning estimated that the provisional GDP growth would definitely surpass 5.5%. With the double digit growth of large scale manufacturing (LSM), the possibility of restricting overall GDP growth to less than 5% seems impossible. In the aftermath of rebasing of national accounts from 2005-6 to 2015-16, the country’s GDP was Rs55.8 trillion for the last fiscal year.
Now it is estimated that the size of the economy might touch Rs63.8 trillion for the current fiscal year or it might cross it because the nominal growth (GDP growth plus inflation) will be gone up by around 19 to 20% for the current fiscal year.