In Pakistan administration after administration errs on the side of data manipulation to show better performance than is in fact the case, which indicates that political as opposed to economic considerations remain paramount.
One may argue that not releasing data does not necessarily imply that the government of the day is not aware of the extent of the prevailing issues that are critical in putting in place mitigating measures/policies in a timely manner.
This is particularly the case when the country is on a rigidly monitored International Monetary Fund (IMF) programme, as we are today, and given that we have been on a Fund programme for most of our history this criticism loses a bit of its pungency.
In Pakistan, however, collecting critical data with political implications has often been routinely deferred, an example is the delay in the census that allows for demarcation of constituencies as well as distribution of resources, (detailed results were uploaded recently on the seventh first digitalized population and housing census); or deferring collection of data that would compromise the government’s claims of improvement in key indicators, an example being the Household Income Survey that was last carried out in 2019 and which incapacitated governments - PTI, Pakistan Democratic Movement, caretakers and PML-N led coalition- from assessing domestic poverty levels which, in turn, has disabled the current economic team to understand that the massive decline in inflation – from over 35 percent to the 4.1 percent in December 2024 – has not generated a feel-good factor within the general public.
Besides, not collecting poverty data has not implied that two other credible sources are not projecting and/or analysing poverty levels notably: (i) international donor agencies with the World Bank report titled Poverty Projections for Pakistan, estimating poverty rate rising to 25.3 percent in 2024, up by 7 percentage points from 2023 that has pushed an additional 13 million people into poverty and that within the “projected increase in poverty, poor households face disproportionately higher welfare losses and get pushed deeper into poverty;” and (ii) domestic private sector economists/think tanks who not only correlate data between government agencies to point out glaring discrepancies but also carry out limited surveys to reach conclusions that are becoming highly embarrassing for the government.
Pakistani governments have been unable to manipulate donor agencies’ data/analysis but have exerted pressure on domestic economists/think tanks, especially those who try to disseminate information through the media (mainstream or social), overtly or covertly - through direct threats to them or their families or appointing them in high-powered committees but rarely, if ever, taking their recommendations on board.
Pakistani administrations are not unique in exhibiting a bias while analysing up-dated macroeconomic indicators, but the bias must be limited to analysis and forecast and not be in the realm of data manipulation.
The IMF staff level report on the Extended Fund Facility (EFF) programme uploaded on its website on 10 October 2024 stated that: “The FY16 NA rebasing and recent publication of quarterly GDP have provided a better basis for assessing economic developments, but important shortcomings remain in the source data available for sectors accounting for around a third of GDP, while there are issues with the granularity and reliability of the GFS (Government Finance Statistics).
The authorities are prioritizing addressing these weaknesses, supported by Fund Technical Assistance on the GFS and a new PPI (Producer Price Index), and the Pakistan Bureau of Statistics (PBS) will soon begin fieldwork for four major surveys ahead of the upcoming NA rebasing to FY26.”
There is no update on the IMF TA on the PBS website or whether the fieldwork on four major surveys have begun though in the Memorandum of Economic and Financial Policies that details the time-bound quantitative and qualitative reforms and structural benchmarks agreed by Pakistan’s economic team leaders in the context of the ongoing EFF, it is acknowledged that: “increasing the granularity and reliability of the Government Finance Statistics is a high priority, and we have requested Fund Technical Assistance to review current data sources and compilation processes and provide guidance on how to improve fiscal reporting in accordance with international standards.
We have made important strides in improving the timeliness and quality of the national accounts, but we recognize that there are still significant shortcomings, including in the quality of producer price data used to estimate GDP volumes, and in the source data available for sectors representing around a third of GDP, which currently rely mostly on extrapolation of growth between censuses in FY06 and FY16.
In anticipation of the FY25-26 rebasing of the National Accounts, the PBS is currently working on producing a new PPI index, supported by IMF TA, with pilot data collection of agricultural and manufacturing activities expected to commence in July 2024.
Relatedly, the PBS will launch fieldwork for four major surveys (including the integrated agricultural census, labour force survey, and household integrated economic survey) in July 2024, from which preliminary results are expected to become available during FY25.”
Information on progress on producing a new PPI is not available on the PBS website and there is no mention of any impending rebasing exercise in the press release issued on 30 December 2024 on the National Accounts Committee meeting which nonetheless provides data that is at odds with the government’s claims of “sustained positive developments.”
Growth rate for 2023-24 was downgraded by 0.02 percentage points to 2.5 percent from an earlier estimate of 2.52 percent against the usual practice of an unrealistic budgeted 3.5 percent. With a population growth rate of 2.5 percent, a 2.5 percent GDP growth will not reduce rising poverty levels in the country. In the current year too, the growth target has already been reduced to 2.5 percent which again is the same rate as the population growth rate and does not take account of the fact that 2 million entrants into the labour market each year will struggle to find jobs that would further increase the number of those being pushed into poverty.
To conclude, it is critical for the government to begin calculating poverty levels because that would empower it to deal with the general public’s visible lack of support for the decline in the rise in prices, and one hopes that the year 2025 is marked by a focus on reducing poverty rather than on meeting expenditure priorities that sustain the elite capture of allocation of resources and revenue sources.
Copyright Business Recorder, 2025
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