The Ministry of Finance (MoF) has responded on Feb 2, 2017 to my article "Misguiding the people" carried by Business Recorder on Jan 25. In the article, I had raised three issues: First, on the release of large-scale manufacturing (LSM) growth number (8%), I had pointed out the surge in LSM growth number in November was the result of 2480 percent growth in sugar production. Adjusting for this idiosyncratic growth number, the LSM growth for the month of November declines to 2.1 percent and July-November 2016 period, it declines to 2.6 percent as against 3.2 percent reported by the Pakistan Bureau of Statistics.
I had argued that the PBS should have either reported the numbers after adjusting for sugar production or should have at least pointed out in the text or in the footnote about the extraordinary surge in LSM growth in November 2016. The MoF mentioned everything in its response but did not respond to the point I raised in my article.
Secondly, I had pointed out that the Finance Minister was factually wrong when he compared the debt and foreign exchange reserves numbers for the period of June 2013 to June 2016. For June 2013, he only reported the State Bank of Pakistan's (SBP) foreign exchange reserves ($6 billion) but for June 2016, he reported the combined reserves of the SBP and the commercial banks ($23 billion instead of $18 billion). The MoF discussed everything under the sun but did not respond to this issue
Thirdly, in response to finance minister's view on the economy when he had stated that "with government's positive measures, all major macroeconomic indicators are moving in the right direction," I simply referred to the performance of LSM, heavy borrowing from the SBP to finance fiscal deficit, the collapse of FBR's tax collection numbers, rising unemployment, declining exports and remittances, and rolling back of reforms. The MoF stated everything except responding to my comments.
Whenever there is a need to respond to articles written by independent economists, the MoF has prepared a standard narrative about the economy which they employ as standard response to articles. Most of the time, its response has nothing to do with targeted articles. The present response of the MoF is exactly along the same lines.