The International Monetary Fund (IMF) has finally removed 2015-16 growth projections of 4.5 percent for Pakistan from its website, revised upward to 4.7 percent in the eleventh review uploaded on 5 July, after Business Recorder sent four questions to the Fund on Monday 18 July. The four questions raised by the newspaper were as follows. First, what factors led to up-gradation of growth projection from 4.5 percent to 4.7 percent during eleventh review of $6.4 billion EFF?
The growth rate projection was 4.5 percent in the tenth review on the premised of 8 percent growth in investment and 2 percent in exports 2. However, the actual investment growth was 5 percent against 8 percent projection and exports was a negative by 9 percent. Second why did the Fund not take up the discrepancy between allocations/actual disbursements under federal and provincial Public Sector Development Programmes (PSDPs) as submitted to the Fund, a prior condition, with the data released in the actual budget on 3 June 2016?
Third, a rise in stocks of energy sector arrears is higher than the decline in the flow of arrears in the energy sector as per the table on page 69 of the uploaded documents on Pakistan on the IMF website - flows declined by 12 billion rupees between 2014-15 and 2015-16 while stocks rose by 36.4 billion rupees during the two years. How do these figures explain the view that stocks have remained stable while flows are declining?
And finally, the newspaper asked what is the basis for the Fund staff's acceptance of government data when independent economists, through use of available and credible primary data (including industry data), have come up with much lower projections of growth? Business Recorder contacted IMF Islamabad-based representative about the delay in the response who acknowledged that usually it does not take so long to respond to media's questions; and promised to get in touch with the relevant person in Washington and get back but there was no feedback till the filing of this story.