PBS - A statistical anomaly

The PBS is notorious for allegedly inflating its data, using tampered numbers to make the economy look better than it really is. The official reported figure of GDP growth is under tremendous fire; most members of the Senate have rejected the government's claim of 4.7 percent GDP growth. Economists in the country are in disagreement with this figure as well, with some putting the figure as low as 3.1 percent. To look for statistical discrepancies, however, one doesn't need to look too closely; just casually peruse the agriculture section of the Economic Survey.

Firstly, we start off with one of the most glaring errors in the report - the cotton crop. The Economic Survey 2015-16 mentions that cotton production was lower by 27.8 percent year-on-year, citing the 2014-15 number as 13.960 million bales and the 2015-16 number at 10,074 million bales. In reality, last year's production was a record 14.864 million bales, while this past season's production has been 9.768 million bales - a decline of 34.2 percent year-on-year.

This is what the Pakistan Cotton Ginners' Association data says - the most authentic source that reports countrywide cotton arrivals every two weeks in consultation with the Karachi Cotton Association and APTMA. The last reported arrivals came in on April 15, 2016, and BR Research confirmed with multiple industry sources that cotton production in fact did not cross the 10 million bales mark this season.

Historically, the PBS' cotton production statistics have on average been four percent lower than the PCGA's reported figures, whereas this year the discrepancy was an increase of over three percent. So, this year's 10-million-bale figure indeed raises some eyebrows.

Then, we can see the numbers for rice. According to the Economic Survey, rice production this year is 6.811 million tons, while last year the same was 7.003 million tons - a fall of 2.7 percent year-on-year. Here, in the absence of production data with the rice association REAP, one can find faults with PBS' numbers by comparing them with the State Bank itself: "Preliminary estimates released in October 2015 showed a lower rice crop of 6.6 million tons, against the target of 6.9 million tons and last year's level of 7.0 million tons. Though confirmed numbers are still awaited, we do not expect any major revision in this assessment," writes the State Bank in its quarterly report on the economy. Moreover, the USDA puts the figures at 6.7 million tons this year versus 6.9 million the year before; using these numbers, the year-on-year decline is at worst 5.7 percent and at best 2.9 percent.

Historically, the USDA's rice production data has always been in line with the PBS data up until 2015. Since then, the PBS figures are greater by around 1.5 percent.

Sugarcane production has also been exaggerated; the Economic Survey puts this year's sugarcane production at 65.475 million tons, while last year's figure is given as 62.826 million - an increase of 4.2 percent. However, the Pakistan Sugar Mills' Association disputes this; as per data available with the PSMA's website, sugar production in 2015-16 was 61.608 million tons while the same last year was 63.203 million - a decline of 2.5 percent.

Historically, the PBS and PSMA have shown little variation in their datasets, save for the latest year. To its credit, however, the SBP's data on sugarcane production seems to back up the PBS rather than the PSMA. Then again, the data for area under cultivation seems to match. For the purposes of this article, we will assume that the PSMA is the more authentic source.

So, we can see a trend of underreporting statistics from last year while exaggerating them for the current year. The cotton crop in particular has been a thorn in the side of the government's performance this year, with Dar holding it accountable for 0.5 percent of GDP growth lost.
Using the other data sources for just three of the five important crops, we see that growth of important crops is actually negative 10 percent as opposed to the reported negative seven percent. With this alteration, and by proportionately dropping the cotton ginning statistic from negative 21.26 percent to negative 26.61 percent based on the PCGA data, we come to the conclusion that agriculture growth was not negative 0.19 percent year-on-year as the PBS claims, but 1.07 percent. The resultant GDP growth then becomes 4.5 percent, as opposed to 4.7 percent.

Bear in mind that we have not questioned the entire livestock, forestry, fishing, and other crop industries, not to mention leaving out wheat and maize from our 'important crop' analysis. Who knows what the figure would be if the data for these is also scrutinized? And that's just for agriculture! The numbers for the industrial sector might also be doctored, and will also be looked at soon.