EDITORIAL: There have been serious challenges to the data compiled by government functionaries by independent economists that have disabled administrations from taking appropriate mitigating measures well in time. There are discrepancies in the calculation of Gross Domestic Product, the sum total of all goods and services within the country, indicated by: (i) lack of synchronicity between sub-sectors for example if the cement sector is witnessing a reduction in output then so must the building sector — a linkage that is often missing in attempts to show a higher growth rate; (ii) inflation is understated by taking account of subsidies be it in electricity tariff earmarked for the poor and vulnerable or be it for essential commodities, a rate not available to even the target group due to supply issues, or be it through a control of the exchange rate that reduces the impact of imported inflation (particularly fuel and cooking oil); and (iii) unemployment rate that is understated, given that Pakistan does not have functioning labour exchanges from which to draw accurate data like in other countries. Others more cynical argue that there is a lack of competent data gatherers and statisticians to present an accurate figure. The compilation of say total livestock is usually an extrapolation which may or may not represent the true picture. These shortcomings were referred to in the document dated 11 October 2024, uploaded on the International Monetary Fund website titled ‘Staff Report For the 2024 Article IV Consultation and Request for an Extended Arrangement under the Extended Fund Facility’, which noted that: “important shortcomings remain in the source data available for sectors accounting for a third of GDP, while there are issues with the granularity and reliability of Government Finance Statistics (GFS)…shortcomings include: (i) reliance on intra-census growth rates to estimate/extrapolate sectors accounting for around a third of GDP; (ii) limited availability of source data for GDP by expenditure; (iii) the absence of income-side estimates. The most significant GFS issues are the lack of: (i) a proper economic classification of spending; (ii) granularity on revenues/expenditure of the provinces and autonomous institutions; (iii) consistency between above- and below-the-line measures of the fiscal deficit. Data on prices is relatively comprehensive and published at a high frequency, though the CPI weights (from FY15/16) are somewhat dated. External sector data is broadly adequate, though estimates of informal flows are not available and further granularity of non-government/financial sector stocks/flows would be useful. Monetary and financial statistics provide good coverage of the banking sector, despite some shortcomings related to banks’ net FX positions.“ This was confirmed by the authorities in the Memorandum of Economic and Financial Policies: “we recognise 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 census 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 Technical Assistance (TA), with pilot data collection of agricultural and manufacturing activities expected to commence in July 2024. Relatedly, the PBS [Pakistan Bureau of Statistics] 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.“ While the Fund approach is premised on the assumption that there is lack of competence, yet independent economists argue that data is intentionally manipulated, as per instructions from senior members of the cabinet who are focused on the political fortunes of the administration rather than on empowering the economic team leaders to take mitigating measures well in time of a crisis. Still others complain about the State Bank of Pakistan’s (SBP’s) deferral of data like the foreign exchange reserves or the real effective exchange rate that may reflect badly on the state of the economy. It is hoped that this practice is abandoned, as it makes a mockery of the government’s claim that’s why SBP takes decisions independent of the treasury department. Copyright Business Recorder, 2025