Disputing Finance Minister Ishaq Dar's claim of achieving 4.7 percent Gross Domestic Product (GDP) for the outgoing fiscal year, Ashfaque Hassan Khan, former advisor to finance ministry said Pakistan's economy grew at the rate of 3.1 percent. "GDP growth of 4.7 percent for 2015-16 was overstated with the objective of manipulating the budget deficit and public debt to GDP ratio," Ashfaque Hassan Khan told Business Recorder.
He said that inflated growth rate has helped Finance Minister to show a lower budget deficit and public debt to GDP ratio. However it would have a negative impact on tax to GDP ratio which would become lower when the GDP growth rate is high. Hassan Khan said the motive for an inflated growth rate is intra-party as well as inter-party politics. The Finance Minister wants to appease and show to Prime Minister Nawaz Sharif that the economy of the country has turned around and it is doing well. At the same time PML-N government wants to pressurise the opposition parties that its economic policies are yielding positive results.
Khan maintained that the ground situation is entirely different from what the government claims with all macroeconomic indicators sliding downward rather than showing any improvement. He said foreign direct investment (FDI) which is considered critical for growth has reached a low level and agriculture sector that provides employment to 42 percent of the population and raw material to industry has shown a negative growth of 0.19 per cent. The question arises as to how the government worked out a 4.7 percent growth number; he stated and added that no independent economist or think tank buys the Finance Minister's claim of 4.7 percent growth.
The lawmakers of the opposition in the Senate as well as in the National Assembly have rejected the government's claim of achieving 4.7 percent GDP growth for the current fiscal year, saying a department dealing with the subject, Pakistan Bureau of Statistics (PBS), was compelled to show this number to fulfil the desire of the Finance Minister to claim on the floor of the House that he was able to achieve the highest growth rate during the last eight years. Social Policy and Development Centre (SPDC), a think tank led by Dr Hafiz Pasha, has tabulated a GDP growth rate of 3.1 percent and not 4.7 percent for fiscal year 2015-16.
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