Rebasing of national accounts (GDP) to be carried out

[Maula Jatt]

https://www.thenews.com.pk/print/915868-rebasing-of-national-accounts-to-be-carried-out

ISLAMABAD: The government has decided for moving ahead with rebasing of national accounts in order to balloon up the overall GDP growth figures for the current fiscal year 2021-22.

Through the re-basing exercise, the base year will be changed from the fiscal year 2005-6 to 2015-16 with an aim to capture data of various sectors of the national economy on a full-scale basis. It is also a fact that it will give only a good feel factor for the incumbent regime by displaying only jacked-up GDP growth figure

The World Bank (WB) has validated the overall methodology for conducting the rebasing exercises in Pakistan and pointed out some deficiencies in respective areas, which could be rectified within the next few days. s.ays.

The Pakistan Bureau of Statistics (PBS) is ready to present the re-basing of national accounts exercise before the high-powered technical committee, Governance Council and then Economic Coordination Committee of the Cabinet (ECC).

With this exercise, some key economic indicators will be improved but some will be further worsened. For instance, with the ballooning of GDP growth, total public debt in percentage of GDP will be improved. However, the FBR’s tax-to-GDP ratio may be worsene

"We have accomplished 36 surveys/studies out of total assigned 42 exercises for changing the base year from 2005-06 to 2015-16 to calculate figures of national accounts as it will help ballooning the overall GDP growth rate in a substantial manner,” top official sources confirmed to The New. d.ews.

The re-basing of National Accounts will be accomplished within the current fiscal year and provisional GDP growth figure for 2021-22 will be calculated on the basis of rebasing exercise."

Top official sources said there are some practical difficulties in the way of rebasing of national accounts as the PBS conducted 42 studies on various sectors of the national economy to finalise weights on the basis of the latest data compiled in the fiscal year 2015-16. The PBS conducted different studies in the last four years. Earlier, such studies were conducted by consultants through the private sector but for the first time it was being done by the PBS itself, so the quality of the done studies needs to be thoroughly scrutinized before granting approval for rebasing of national accounts on the basis of 2015-16.

The last rebasing of national accounts was done in 2005-6 during the Musharraf/Shaukat Aziz regime. Earlier, the rebasing was done in 1999-2000 after a period of 20 years, so it was decided that the rebasing exercise would be done after five years. The economic census was also done in 2005-6 and the national accounts were re-based on the basis of the same data, so it was decided that the rebasing of national accounts should be done after a period of 10 years.

The PBS captured the data on the stipulated time-frame but for accomplishing all other requirements, it took almost four years for conducting other studies. Now it is hoped that the rebasing exercise will be implemented to change the base year from 2005-6 to 2015-16 because in 10 years, there are many ground realities changed. So fresh data capturing methodology should be devised to get a more realistic picture of the national economy

 

[S.Y.A]

https://www.thenews.com.pk/print/915868-rebasing-of-national-accounts-to-be-carried-out

ISLAMABAD: The government has decided for moving ahead with rebasing of national accounts in order to balloon up the overall GDP growth figures for the current fiscal year 2021-22.

Through the re-basing exercise, the base year will be changed from the fiscal year 2005-6 to 2015-16 with an aim to capture data of various sectors of the national economy on a full-scale basis. It is also a fact that it will give only a good feel factor for the incumbent regime by displaying only jacked-up GDP growth figure

The World Bank (WB) has validated the overall methodology for conducting the rebasing exercises in Pakistan and pointed out some deficiencies in respective areas, which could be rectified within the next few days. s.ays.

The Pakistan Bureau of Statistics (PBS) is ready to present the re-basing of national accounts exercise before the high-powered technical committee, Governance Council and then Economic Coordination Committee of the Cabinet (ECC).

With this exercise, some key economic indicators will be improved but some will be further worsened. For instance, with the ballooning of GDP growth, total public debt in percentage of GDP will be improved. However, the FBR’s tax-to-GDP ratio may be worsene

"We have accomplished 36 surveys/studies out of total assigned 42 exercises for changing the base year from 2005-06 to 2015-16 to calculate figures of national accounts as it will help ballooning the overall GDP growth rate in a substantial manner,” top official sources confirmed to The New. d.ews.

The re-basing of National Accounts will be accomplished within the current fiscal year and provisional GDP growth figure for 2021-22 will be calculated on the basis of rebasing exercise."

Top official sources said there are some practical difficulties in the way of rebasing of national accounts as the PBS conducted 42 studies on various sectors of the national economy to finalise weights on the basis of the latest data compiled in the fiscal year 2015-16. The PBS conducted different studies in the last four years. Earlier, such studies were conducted by consultants through the private sector but for the first time it was being done by the PBS itself, so the quality of the done studies needs to be thoroughly scrutinized before granting approval for rebasing of national accounts on the basis of 2015-16.

The last rebasing of national accounts was done in 2005-6 during the Musharraf/Shaukat Aziz regime. Earlier, the rebasing was done in 1999-2000 after a period of 20 years, so it was decided that the rebasing exercise would be done after five years. The economic census was also done in 2005-6 and the national accounts were re-based on the basis of the same data, so it was decided that the rebasing of national accounts should be done after a period of 10 years.

The PBS captured the data on the stipulated time-frame but for accomplishing all other requirements, it took almost four years for conducting other studies. Now it is hoped that the rebasing exercise will be implemented to change the base year from 2005-6 to 2015-16 because in 10 years, there are many ground realities changed. So fresh data capturing methodology should be devised to get a more realistic picture of the national economy

noob question: how will that help? is it equal to registering the informal economy? will expand the tax net and bring tax-chors under fbr's authority?

 

[HRK]

noob question: how will that help? is it equal to registering the informal economy? will expand the tax net and bring tax-chors under fbr's authority?

- It will help better understanding of current economy of Pakistan and its potential, since 2005 many new sector in business have emerged which contributing in economy but are not part of GDP calculations, so rebasing the economy to 2015 will include many such sectors.

- This will indirectly help to identify the potential of Tax collection from the economy, this would also indirectly help us to attract FDI as the increase in GDP will show increase potential of Business returns.

- Possibly it will also affect per capita and PPP of the country positively.

- All in all on personal grounds I expect the GDP between $320-350 billion, even if we consider the negative impact of devaluation of PKR against the US $

 

[RealNapster]

All in all on personal grounds I expect the GDP between $320-350 billion, even if we consider the negative impact of devaluation of PKR against the US $

At current rate we are around $275 billion. The rebasing is expected to add atleast 25-35% increase. So we are looking at a figure between $344-$370. If we are able to reduce dollar to Pkr exchange rate to 165. We will be looking at a GDP of $375-$400 billion.

So, all in all, it is possible that PTI run for next election on a GDP figure of $400 billion and Per capita of $1820 as compare to current $1250+-.

Btw I have a question. Why rebase till 2016 ? Why not till 2021 ? 2017 and 2018 was good years for Pakistan in economic term as we saw drop in circular debt, drop in current account deficit and increase in industries production and exports. Why not atleast rebase till 2018 ? As with the current rebasing our GDP figures will still be 5 years old on day 1 of rebasing. Which means 5 years down the line and our GDP figures will be based on 10 years old data. Or can we rebase again in two years time, let say 2024. ?

 

[HRK]

Btw I have a question. Why rebase till 2016 ? Why not till 2021 ?

Ideally change of base year should be done after every 5 years but previous economic and political managers were not giving priority to this exercise because it may show inflated GDP growth only one time but afterward the GDP calculation according to new base year could show slower GDP growth, so may be this was the reason PPP and NS government were not interested.

Secondly it is also related to the DATA gathered and capacity of DATA gathering institution , current exercise would bring the economic DATA of 2021 gather to 2015 standard so in simple term understand it as the current output of Pakistan in 2021 would be presented in Constant US $ rate of base year, currently after devaluation of PKR it is near +275 billion

Keep in mind that in 2015 GDP of Pakistan was almost equivalent to current GDP of Pakistan with base year of 2005, in constant 2015 $ rate GDP of Pakistan for 2021 should be around $ 320-340+ billion.

As per World bank estimate in 2020 GDP of Pakistan in constant 2015 US $ was $ 323.8 billion, as shown below

[click]

So 2015 as base year would show true value not the inflated figures, and it will bring the figures quoted by Government of Pakistan near to the figures and base year of World Bank and other International Organization.

If we are able to reduce dollar to Pkr exchange rate to 165. We will be looking at a GDP of $375-$400 billion.

PKR is expected to devalue further before year end.

 

[Imran Khan]

if gov try to collect black economy too and bring real figure it will be much bigger .

 

[bête noire]

https://www.thenews.com.pk/print/915868-rebasing-of-national-accounts-to-be-carried-out

ISLAMABAD: The government has decided for moving ahead with rebasing of national accounts in order to balloon up the overall GDP growth figures for the current fiscal year 2021-22.

Through the re-basing exercise, the base year will be changed from the fiscal year 2005-6 to 2015-16 with an aim to capture data of various sectors of the national economy on a full-scale basis. It is also a fact that it will give only a good feel factor for the incumbent regime by displaying only jacked-up GDP growth figure

The World Bank (WB) has validated the overall methodology for conducting the rebasing exercises in Pakistan and pointed out some deficiencies in respective areas, which could be rectified within the next few days. s.ays.

The Pakistan Bureau of Statistics (PBS) is ready to present the re-basing of national accounts exercise before the high-powered technical committee, Governance Council and then Economic Coordination Committee of the Cabinet (ECC).

With this exercise, some key economic indicators will be improved but some will be further worsened. For instance, with the ballooning of GDP growth, total public debt in percentage of GDP will be improved. However, the FBR’s tax-to-GDP ratio may be worsene

"We have accomplished 36 surveys/studies out of total assigned 42 exercises for changing the base year from 2005-06 to 2015-16 to calculate figures of national accounts as it will help ballooning the overall GDP growth rate in a substantial manner,” top official sources confirmed to The New. d.ews.

The re-basing of National Accounts will be accomplished within the current fiscal year and provisional GDP growth figure for 2021-22 will be calculated on the basis of rebasing exercise."

Top official sources said there are some practical difficulties in the way of rebasing of national accounts as the PBS conducted 42 studies on various sectors of the national economy to finalise weights on the basis of the latest data compiled in the fiscal year 2015-16. The PBS conducted different studies in the last four years. Earlier, such studies were conducted by consultants through the private sector but for the first time it was being done by the PBS itself, so the quality of the done studies needs to be thoroughly scrutinized before granting approval for rebasing of national accounts on the basis of 2015-16.

The last rebasing of national accounts was done in 2005-6 during the Musharraf/Shaukat Aziz regime. Earlier, the rebasing was done in 1999-2000 after a period of 20 years, so it was decided that the rebasing exercise would be done after five years. The economic census was also done in 2005-6 and the national accounts were re-based on the basis of the same data, so it was decided that the rebasing of national accounts should be done after a period of 10 years.

The PBS captured the data on the stipulated time-frame but for accomplishing all other requirements, it took almost four years for conducting other studies. Now it is hoped that the rebasing exercise will be implemented to change the base year from 2005-6 to 2015-16 because in 10 years, there are many ground realities changed. So fresh data capturing methodology should be devised to get a more realistic picture of the national economy

Should've been done a bit earlier. There will be a new economic leagues table published on 26th (likely) of this month. It forecasts 15 years down the line. It would have been better if they could take fresh data into account. Although I don't know if they would take the recently rebased (2nd November) GDP data published of Bangladesh so maybe even publishing a bit earlier might not help.

This is the last years leagues table publication: CEBR WORLD ECONOMIC LEAGUE TABLE 2021

 

[sparten]

noob question: how will that help? is it equal to registering the informal economy? will expand the tax net and bring tax-chors under fbr's authority?

Call it the latent economy. Our economic numbers are bad. Our actual on the ground situation is not as bad. At least not as bad as it should be according to the official numbers. Which means there is a difference.

 

[SaadH]

noob question: how will that help? is it equal to registering the informal economy? will expand the tax net and bring tax-chors under fbr's authority?

That's how Bangladesh keeps growing exponentially every two years by "rebasing" their economy. And that's the formula they copied from India...

 

[Hassan Guy]

When Nigeria rebased they went from 270 billion to over 500.

 

[Maula Jatt]

When Nigeria rebased they went from 270 billion to over 500.

They discovered a gold mine?

 

[Imran Khan]

That's how Bangladesh keeps growing exponentially every two years by "rebasing" their economy. And that's the formula they copied from India...

but on ground a common bdian or indian see no change . what is the benifit of this magic its remind me shoukat aziz era when he daily claim paksitan is growing like rocket speed but on ground there was very little impact on soceity . i think bd indians fake figures help nothing but false proud

 

[RealNapster]

PKR is expected to devalue further before year end

As government announced, we are expected to see a fall in import figures and increase in exports. Hence it is expected that rupee may strengthen or atleast stabilise at current rate.

 

[SaadH]

but on ground a common bdian or indian see no change . what is the benifit of this magic its remind me shoukat aziz era when he daily claim paksitan is growing like rocket speed but on ground there was very little impact on soceity . i think bd indians fake figures help nothing but false proud

It works to attract FDI...