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Print Print 2019-08-29

Partly Facetious : Understating budget deficit

"I reckon Hafeez Sheikh has surpassed his previous record."
Published August 29, 2019

"I reckon Hafeez Sheikh has surpassed his previous record."
"Are you being facetious?"
"Absolutely not, I mean it."
"Well then the credit goes to The Khan, he has forced our HS, our very own High Speed Diesel to take appropriate decisions, though after signing off on the IMF programme with detailed actions to be taken during the next 39 months, and presenting the budget the guy told his Big Boss that he will now prepare a road map, I mean what was that all about?"
"You are wrong, so very wrong."
"I am sure I am not wrong, the policies for the next 39 months have been agreed and there is little if any manoeuvrability so I don't understand..."
"I am 100 percent right and what's more, when I tell you where you went wrong you will be forced to agree with me."
"I give up, tell me."
"It's no longer 39 months; it' now thirty seven months, less a couple of days."
"Don't be facetious."
"OK, but what did you mean when you said he surpassed his previous record?"
"The guy under-stated the budget deficit, which was courtesy Asad Umar and..."
"So nothing to do with HS?"
"Nothing at all but the deficit cited in the budget documents was a record high understatement - actual deficit for last year was 8.9 percent while the budget documents claimed 7.2 percent and viola a difference of 1.7 percent which means hundreds of billions of rupees..."
"I don't see why you are surprised. When former President Zardari appointed him as the country's finance minister remember he slashed inflation by half over night - from around 24 percent to around 12 percent by simply changing the weightage of food by 6 percent to achieve his objective...."
"That understatement reflected well on his own performance but why would HS show better performance during Asad Umar's tenure?"
"That's right; perhaps he was given the figure of 7.2 percent and never queried it."
"That's unforgivable - I can forgive deliberate understating of data but I can't forgive a budget maker not being aware of the true picture."
"So don't forgive him, see if he cares. There are only two men whose opinion he cares about and, need I add, neither is an economist."
"Which two men?"
"If you don't know that then you are an ostrich."

Copyright Business Recorder, 2019

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