Impactful economic policy, decision-making require accurate, timely data: WB

ISLAMABAD: While the November release of quarterly national accounts represents an important step forward for economic statistics in Pakistan, projects are underway for future improvements, including further refinements of seasonally adjusted estimates for eventual public release and the development of quarterly expenditure-based GDP, says the World Bank.

The bank officials in a blog stated that smart, impactful economic policy and decision-making require accurate, timely data.

Toward this end, and with support from the World Bank, on November 28, 2023, the Pakistan Bureau of Statistics (PBS) launched new Quarterly National Accounts (QNA), a landmark development in the nation’s macroeconomic statistics program.

Following a rigorous methodology aligned with international standards from the System of National Accounts, this represents a significant leap forward for short-term economic policy responses in Pakistan. The new quarterly data are a response to user demand for more frequent and up-to-date information on Pakistan’s economy and will enable more timely and impactful decision-making.

Quarterly National Accounts are important for evaluating short-term economic performance and provide a foundation for forecasting the economy’s future trajectory. This first release for Pakistan included quarterly estimates of gross value added (GVA) by industry and quarterly GDP in current and constant prices, consistent with the most recent published annual GDP estimates.

These new quarterly data can be used to track the performance of each industry, to identify the main contributors to overall economic growth, and to provide early, robust estimates of annual GDP for Pakistan.

For example, Quarterly National Accounts enable the development of forecasts via econometric models and monitoring of business cycles, in addition to other tools and analyses. This dataset is crucial for timely measuring of the impact of economic shocks and understanding dynamic relationships between different aspects of the economy, particularly in periods of high inflation or significant changes in relative prices.

These QNA provide a more comprehensive picture of economic trends than specific short-term indicators can offer since they are compiled within a comprehensive and integrated national accounts framework. The QNA data can indicate, for example, whether a decrease in output is the result of internal or external demand, in addition to identifying the industries impacted.

World Bank technical assistance was provided in a joint effort by the Economic, Debt and Price Data Unit (DECED) of the Bank’s Development Economics Data Group (DECDG) and the Poverty and Equity Global Practice, with the goal of closing an important gap in core economic data in Pakistan.

Via regular collaborative virtual technical sessions over a 12-month period and a one-week, face-to-face workshop in June 2023, the World Bank provided crucial support to establish a methodology, evaluate data sources, design a measurement framework, formulate a release and revision strategy, and fully document the process. Prioritizing the ongoing sustainability of the report going forward, the team put in place a practical implementation strategy, working closely with the PBS to ensure long-term success.

In addition to enabling data-driven decision-making in the public and private sectors in periods of economic volatility, this initiative positions Pakistan as a full subscriber to the IMF Special Data Dissemination Standard (SDDS), enhancing its access to international capital markets and facilitating further economic development.

Copyright Business Recorder, 2024