The International Monetary Fund (IMF) has expressed concern over the Government Finance Statistics (GFS) which suffers from lack of general government finances due to inadequate reporting of fiscal operations by provinces and local governments.
The Fund further says the concepts and definitions used in compiling GFS were broadly based on the methodology prescribed in a Manual on Government Finance Statistics, 1986 (GFSM), except that the treatment of privatisation proceeds resembles the methodology of the Government Finance Statistics Manual (GFSM) 2001.
The scope of GFS is budgetary, which does not cover the activity of extra-budgetary funds. Classification and sectorisation systems follow GFSM 1986 standards only to a limited extent. Institutional sectors are not explicitly defined, since only budgetary data are covered in the GFS.
Although, central and provincial governments are distinguished, local governments are included with the provincial governments. The classification of expenditure departs substantially from GFSM 1986 methodology, because the economic and functional classifications are mixed in reporting, with defence and government administration expenditures not clearly distinguished according to economic classification.
According to Fund staff report for the 2005 Article IV consultation, transactions were recorded on a gross basis and corrective transactions were not necessarily made in the original period, as required by GFSM 1986.
It says plans for improvement of GFS are taking place within the context of the Project for the Improvement of Financial Reporting and Auditing (Pifra). Although there are no specific plans to migrate to the GFSM 2001 standard-as recommended by the data reports on the Observance of Standards and Codes (ROSC)-the Ministry of Finance will consider adopting the GFSM 2001 in the long-term.
The Fund also encouraged the authorities to further improve the quality and timeliness of data, including data on the domestic debt, in order to allow better analysis and policy formulation, and with a view to subscribing to the Special Data Dissemination Standard.
Though the IMF recognises that Pakistani authorities were strongly committed to adhering to internationally accepted standards and good practices, as demonstrated by their participation in the General Data Dissemination System (GDDS) since 2003.
Pakistan meets the recommendations for the coverage, periodicity and timeliness of most GDDS data categories. The only exceptions are the timeliness of the GDP and the lack of annual data on wages/earnings.
IMF says that for subscription to the Special Data Dissemination Standard (SDDS), Pakistan would need to disseminate the monthly analytical accounts of the SBP with a timeliness of two weeks; monthly transaction data on central government operations with a timeliness of one month; quarterly data on the national accounts, employment, unemployment, wages/earnings, and external debt, all with a timeliness of one quarter; more detailed breakdown of data on central government debt and external debt; annual data on its international investment position; and update and expand the metadata on compilation and dissemination practices.
About the Federal Bureau of Statistics (FBS), the Fund says that it recently completed a revision of the national accounts, to bring them in line with the concepts and definitions of the 1993 System of National Accounts (SNA). As part of this exercise, the base year was moved from 1980/81 to 1999/2000. However, there remains room for further improvement.
As noted by the data Reports on the Observance of Standards and Codes (ROSC), informal economic activities need to be better captured, while newly emerging activities, such as in the information technology sector, continue to pose challenges. Some of these gaps are being identified in the analysis of the results of the 1999/2000 Economic Census already available for agriculture, manufacturing, electricity, and education.
Following up on the recommendations of the data ROSC, an IMF Quarterly National Accounts (QNA) mission also visited Pakistan in April-June 2005 to assist the FBS in the development of QNA and to advise on the dwelling rent component of the consumer price index (CPI).
In the process of reviewing the sources and methods used to compile QNA, a number of deficiencies in the annual compilation methods were discovered. The mission provided recommendations to address these shortcomings.
With respect to labour market statistics, the FBS is investigating the feasibility of compiling quarterly employment/unemployment data and of disseminating data on wages/salaries.
Pakistan's balance of payments statistics are compiled broadly in accordance with the concepts and definitions of the Balance of Payments Manual, Fifth Edition (BPM5). However, the presentation of the balance of payments on the web and in the publications of the SBP is still mostly based on the BPM4; recently, the SBP has commenced publishing the balance of payments based on BPM5 on its website.
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