Think tank calculates GDP growth at 3.1%

[Abingdonboy]

Can't Pak economy reach 7% gdp growth before 2018? I mean why an operational gwadar port only is the solution for Pak economy? Yeah, gwadar is definitely a plus point but back in 60, 80s and in 2003-2007 Pak economy has grown without gwadar. The people driving our economy are not credible enough to make Pak economy grow.

How can a port alone increase GDP growth by 3-4%? I don't think anyone who can make such a claim truly understands what Gross Domestic Product truly means. Without having a signifcant increase in the manufacturing sector so as to make use of the port, building a port alone will not add anything to GDP.

 

[My-Analogous]

ISLAMABAD: Pakistan’s economy grew at a pace of 3.1% in the outgoing financial year, an independent think tank claimed on Monday repudiating a claim by the government’s economic managers that the GDP growth rate was 4.7%.

The claim by the Social Policy and Development Centre (SPDC) has dealt a second major blow to the credibility of the Pakistan Bureau of Statistics (PBS) in less than a week. Earlier, the Policy Research Institute of Market Economy showed in a report that the BPS was understating the inflation rate.

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“GDP growth rate is 3.1%, not 4.7%” in fiscal year 2015-16, according to the SPDC report. Former interim prime minister and world-renowned economist Moeen Qureshi is the patron of SPDC, while former finance secretary Saeed Qureshi and former State Bank governor Dr Ishrat Husain are on its board.

While launching the Economic Survey of Pakistan on June 2, Finance Minister Ishaq Dar boasted the GDP grew at the rate of 4.7%, which was the highest in the last eight years. Conversely, the SPDC claims the provisional growth rate was 3.1% — the lowest rate in seven years.

The SPDC said it was the third consecutive year that the PBS exaggerated the GDP growth rate. In June 2014, the PBS brought down the relatively high growth rate achieved in 2011-12 from 4.4% to 3.8%. “This was done to demonstrate that the GDP growth rate of 4% in 2013-14 was the highest in the last six years,” according to the report.

According to the SPDC estimates, the growth rate in 2015-16 had been overstated in 10 out of the 18 sectors of the economy. “Almost 60% of the overstatement is in the services sector.”

Budget woes: ‘Federal budget will negatively impact industries in K-P’

Against the official claim of only 0.2% negative growth in agriculture, the sector actually contracted 2%, it said. Similarly, industry grew at a pace of 5.5% against the government’s claim of 6.8%. Moreover, the SPDC stated that the services sector’s growth was 4.1%, implying a GDP growth rate in 2015-16 of 3.1% against the official claim of 5.7%.

The SPDC underlined that its claim that the economy grew at a pace of only 3.1% was consistent with findings of over last four decades that in a year when the agricultural sector declines, the GDP growth rate never exceeds 4%.

The agriculture sector is important for Pakistan not only because it accounts directly for 21% of GDP but also 60% of the manufacturing is agro-based and over 40% of trading and transport is of agricultural products, said the SPDC.

The think tank noted that electricity generation increased by only 2% and with this little increase in output, the economy cannot grow at the rate of 4.7%.

Finance Minister Dar is increasingly coming under pressure to reform the PBS. He admitted during a recent news conference that there were some legitimate questions about the working of the PBS because nobody ever raised such questions about the working of the Securities and Exchange Commission of Pakistan and State Bank of Pakistan.

Budget 2016-17: PBIF chief calls budget ‘over-optimistic’

Last month, the finance minister had offered to engage international experts to resolve the controversy over calculation of GDP but no meaningful effort has since been made in that direction.

The SPDC also noted that private investment also dropped in the outgoing financial year despite an improvement in the security situation, extraordinarily low interest rates and greater access to credit. The government has missed the investment target for 2015-16.

It was of the view that Chinese investment is substituting foreign direct investment (FDI) from other countries instead of complementing it. The net flow of FDI remained only $1 billion during the first 10 months of 2015-16 against the annual target of $3.3 billion.

Published in The Express Tribune, June 7th, 2016.

Thank you for making politics on economy. Who need enemy to destroy Pakistan when Naya Pakistan can do that.

 

[BetterPakistan]

Thank you for making politics on economy. Who need enemy to destroy Pakistan when Naya Pakistan can do that.

Such foolish response wasn't required. Its better to live in harsh reality rather than living in lies. And its not PTI, its market watchers who claimed GDP growth was no more than 3.1%.

We all remember how FM tried to fooled IMF with incorrect GDP growth but IMF caught it and later your FM said that it was a typo

How can a port alone increase GDP growth by 3-4%? I don't think anyone who can make such a claim truly understands what Gross Domestic Product truly means. Without having a signifcant increase in the manufacturing sector so as to make use of the port, building a port alone will not add anything to GDP.

Its not a port. Its a big investment coming with the port. This transit route will make Pakistan earn billions which truly can increase Gross Domestic Product. I think you need to research what CPEC is.

 

[My-Analogous]

Such foolish response wasn't required. Its better to live in harsh reality rather than living in lies. And its not PTI, its market watchers who claimed GDP growth was no more than 3.1%.

We all remember how FM tried to fooled IMF with incorrect GDP growth but IMF caught it and later your FM said that it was a typo



Its not a port. Its a big investment coming with the port. This transit route will make Pakistan earn billions which truly can increase Gross Domestic Product. I think you need to research what CPEC is.

First of all it is our FM not my and if your are foreigner then you have no right to interfere in our internal matter, second same thing happened in India as well but they didn't highlight that and use it for political gain. It is a shame for all political parties to prefer there own interest then the national. By the way i am not a supporter of Nura league. My only interest is to protect and fight for national interest.

 

[Zaneesh852]

This think tank has a history of "under opnioning" the growth. I couldn't search the link but they made a similar claim last year. The only years they appear to have remained calm were the ones when the Chairman i.e. Hafiz Pasha was running the finance ministry
http://www.dawn.com/news/202012/spdc-questions-govt-s-claim-of-reducing-poverty
http://www.dawn.com/news/106528/spdc-questions-govt-s-gdp-growth-figure
http://paktribune.com/news/Unemployment-GDP-growth-fall-recorded-in-2003-4-SPDC-102129.html

 

[Delta9]

This think tank has a history of "under opnioning" the growth. I couldn't search the link but they made a similar claim last year. The only years they appear to have remained calm were the ones when the Chairman i.e. Hafiz Pasha was running the finance ministry

They were right, in last year also.PML(N) goverment has a habit of fudging growth numbers, to prove their competency.

ISLAMABAD:
After denying it for weeks, the government has finally admitted that economic growth for the recently-concluded fiscal year is expected to be around 3.3% – the worst in years – breaking the myth of economic revival in the first year of the Pakistan Muslim League-Nawaz (PML-N) government.

The admission, however, was only made in front of the International Monetary Fund (IMF).

“We now expect that the GDP will expand by about 3.3% in fiscal year 2013-14,” the government said in the Memorandum of Economic and Financial Policies (MEFP) which it submitted to the international lender on June 19.

Publicly, the government has maintained that the growth in 2013-14 stood at 4.1%. The figure was announced as the preliminary growth rate for the previous fiscal year and published in the Economic Survey of Pakistan 2013-14 as well as the State Bank of Pakistan’s (SBP) quarterly report released yesterday. The government has yet to share the actual growth rate with people and Parliament.

Pakistan needs an annual growth rate of over 7% to accommodate the bulk of youth that is entering the market every year but remains jobless due to limited economic opportunities, according to the Planning Commission of Pakistan.

The government shared its fresh estimates of economic growth with IMF two days before the budget was approved by Parliament but never shared these details, either with lawmakers or the federal cabinet.

The MEFP was attached with the letter of intent (LoI) the government submitted to IMF while seeking approval for the fourth $555 million tranche of the $6.5 billion loan programme. The LoI is jointly signed by Finance Minister Ishaq Dar and SBP Governor Ashraf Wathra.

The rate mentioned in the MEFP is even lower than the 3.7% growth achieved by the Pakistan Peoples Party (PPP) government in its last year in power. The figure was then the lowest rate in five years.

The 3.3% growth rate is in line with IMF projections but even lower than the estimates of the Institute for Policy Reforms (IPR) which had predicted 3.5% growth rate. The government had vehemently contested IPR’s estimates.

The government has delayed the scheduled release of the third quarter GDP figures – perhaps to hide dismal economic performance – and decided that it will announce in October this year.

The Express Tribunetried to contact finance ministry spokesman Rana Assad Amin and Asif Bajwa, chief statistician of Pakistan Bureau of Statistics. Neither of them responded to questions regarding why these estimates were not shared with Parliament and the reasons behind hiding this information.

“In my budget speech, I had predicted that very soon the government’s own documents would disclose that the economic growth rate was not 4.1% in fiscal year 2013-14,” said Pakistan Tehreek-e-Insaf’s (PTI) financial wizard and member of the National Assembly Asad Umar.

He said his party will move a privilege motion in the lower house. “By concealing facts from the National Assembly, the government has breached the privilege of the lower house of Parliament,” the PTI MNA added.

The government has also misled Parliament and the federal cabinet when it came to growth estimates for fiscal year 2014-15. It got a growth rate of 5.1% approved from the National Economic Council and shared the same with Parliament.

But according to the MEFP, “in the next fiscal year, expansion should accelerate to 4%,” as downside risks to growth remain. The government’s 4% growth estimates are in line with the IMF’s projections that also see a growth rate of around 4% in the current fiscal year.

Published in The Express Tribune, July 11th, 2014.

 

[Certain Somebody]

This is so disappointing. And yet people still support Noon-league.

 

[BetterPakistan]

First of all it is our FM not my and if your are foreigner then you have no right to interfere in our internal matter, second same thing happened in India as well but they didn't highlight that and use it for political gain. It is a shame for all political parties to prefer there own interest then the national. By the way i am not a supporter of Nura league. My only interest is to protect and fight for national interest.

If he's not your FM then its not your matter so get out of it. Secondly I am a Pakistani and I am out of Pakistan just for vacations. I don't give a damn if such happened in India. The thing here is that our present govt is trying to fool everyone as always they did and people like you are believing them. Its not PTI who is saying it. Every economist in Pakistan is saying that GDP growth wasn't more than 3.1%. Its shame for those who are lying. So your national interest is to hide the lies ???

You arguments are foolish. You are asking me to not post the facts and let people believe the lies. I am stunned to see such mentality and above it you are saying that you are protecting national interest? What a joke

@RiazHaq what you think about Govt claiming 4.71% gdp growth while independent experts are saying GDP growth was not more than 3.1% for 2015-16

 

[RiazHaq]

If he's not your FM then its not your matter so get out of it. Secondly I am a Pakistani and I am out of Pakistan just for vacations. I don't give a damn if such happened in India. The thing here is that our present govt is trying to fool everyone as always they did and people like you are believing them. Its not PTI who is saying it. Every economist in Pakistan is saying that GDP growth wasn't more than 3.1%. Its shame for those who are lying. So your national interest is to hide the lies ???

You arguments are foolish. You are asking me to not post the facts and let people believe the lies. I am stunned to see such mentality and above it you are saying that you are protecting national interest? What a joke

@RiazHaq what you think about Govt claiming 4.71% gdp growth while independent experts are saying GDP growth was not more than 3.1% for 2015-16

Here's what I think:

 

[war&peace]

Here's what I think:

His logic is totally wrong...self appointed analysts are really bad for the country but who cares.. All he is talking about the construction and real estate...how does it represent the growth, the govt is spending borrowed money on some crappy projects ...neither it helps increase the exports nor it helps country any other way.

 

[kadamba-warrior]

His logic is totally wrong...self appointed analysts are really bad for the country but who cares.. All he is talking about the construction and real estate...how does it represent the growth, the govt is spending borrowed money on some crappy projects ...neither it helps increase the exports nor it helps country any other way.

You do realize that the baldy in the video (no disrespect intended to the baldies world over, of course) you are referring to as "self-appointed-analyst", is Mr @RiazHaq himself, right?

 

[raj76]

His logic is totally wrong...self appointed analysts are really bad for the country but who cares.. All he is talking about the construction and real estate...how does it represent the growth, the govt is spending borrowed money on some crappy projects ...neither it helps increase the exports nor it helps country any other way.

i studied finance but not qualified economist IMO that guys has no clue what he is saying service sector if 60% of gdp that to if u r not exporting (real estate share in economy is considered as a bubble tbh) u r services is a bad indicator and agriculture may it be 21% if not doing well will impact GDP by 1-2% because the cycle of economy in rural sector slows down

 

[My-Analogous]

If he's not your FM then its not your matter so get out of it. Secondly I am a Pakistani and I am out of Pakistan just for vacations. I don't give a damn if such happened in India. The thing here is that our present govt is trying to fool everyone as always they did and people like you are believing them. Its not PTI who is saying it. Every economist in Pakistan is saying that GDP growth wasn't more than 3.1%. Its shame for those who are lying. So your national interest is to hide the lies ???

You arguments are foolish. You are asking me to not post the facts and let people believe the lies. I am stunned to see such mentality and above it you are saying that you are protecting national interest? What a joke

@RiazHaq what you think about Govt claiming 4.71% gdp growth while independent experts are saying GDP growth was not more than 3.1% for 2015-16

Read my post again and then make comments again and don't be like IK talk first and think later. By the way

His logic is totally wrong...self appointed analysts are really bad for the country but who cares.. All he is talking about the construction and real estate...how does it represent the growth, the govt is spending borrowed money on some crappy projects ...neither it helps increase the exports nor it helps country any other way.

How to Calculate Growth Rate of Real GDP
Real Gross Domestic Product (Real GDP) is a modification of the basic Gross Domestic Product (GDP) calculation that is commonly used to measure the size and growth of a country's economy. Real GDP involves modifying the normal GDP figure to account for inflation and remove the impact that it has on GDP growth over time.

While Real GDP is itself a useful number calculated to reflect the value of a country's economy it is far more insightful to assess GDP over time and see how a country's economy is growing (or contracting) over time.

For reference typically GDP is calculated as:

• GDP = Consumption + Investment + Government Spending + Exports – Imports

To factor inflation into Real GDP the following formula is then typically used:

• Real GDP = GDP / (1 + Inflation since base year)

Calculating the Real GDP Growth Rate
Calculating the Real GDP growth rate is fairly straightforward after the GDP and Real GDP figures are available. It's important to note that the complexity and work required to accumulate information also means that calculating GDP (or Real GDP) personally is nearly impossible, so you will have to rely on an organization that publishes the data. Calculating the 2014 Real GDP growth rate would be done as follows:

• 2014 Real GDP Growth Rate = (2014 Real GDP – 2013 Real GDP) / 2013 Real GDP

This will provide the Real GDP growth rate, expressed as a percentage, for the 2014 year. This figure can then be compared to the Real GDP growth rates of prior years (calculated the same way) or to that of other countries. The comparison of Real GDP growth rates can be incredibly useful to see how a country itself is trending over several years (getting better or worse) or to see how in absolute terms the country's growth compares to that of comparable economies.

Calculating a quarterly Real GDP growth rate is also straight forward. The quarterly Real GDP growth rate would be calculated as follows:

• 2014 Q2 Real GDP Growth Rate = (2014 Q2 Real GDP – 2014 Q1 Real GDP) / 2014 Q1 Real GDP

This will provide the Real GDP growth rate percentage for Q2 of 2014 alone. Once the figures for each quarter in 2014 have been prepared you can add them all together to arrive at the 2014 Real GDP growth rate (or follow the annual process indicated above).
Importance of Using Real GDP Growth Rates
Inflation can have a significant impact on the dollar value of a country's economy and adjusting GDP to use Real GDP provides far more insight in terms of what the true growth has been and the true change in the country's purchasing power. Accounting for inflation when comparing growth rates across countries becomes even more important when you consider that different countries experience different inflation rates over time. A country with a 7% inflation rate will see far more of their GDP's dollar value removed by using a Real GDP figure than a country with 1% inflation over the same period. By using Real GDP you get a clearer picture in terms of the actual purchasing power improvement of the individual countries economies.

http://www.investorguide.com/article/15785/how-to-calculate-growth-rate-of-real-gdp-d1412/

bottomline: Construction industry is always consider backbone of any economy and it is directly support over 40 industries and many indirect industries as well and some major industries are

1. Steel
2. Cement
3. Construction equipments
   
4. Sanitary wares
5. Electrical Industries
6. Metal Casting (like ironmongers manufacturing)
7. Architects firms
8. Saw mills
9. Gypsum/ GRC Manufacturers
10. Electronic Industries. etc etc

So by saying that 60% economy doesn't matter and 21% economy is very impotent is wrong. In KPK they also must release that on economy. They are just doing propaganda and nothing more and if they are really good then show us actual figure of KPK GDP growth. For your easy reference please check this

http://www.theigc.org/project/khyber-pukhtunkhwa-economic-strategy-report/

 

[BetterPakistan]

Read my post again and then make comments again and don't be like IK talk first and think later. By the way

Yeah, read your post again whose moral was "Let people believe the lies to protect national interest because it happened in India too".

Second thing, Don't include my leader into it as it is not the matter of concern. You better think first what is your national interest and don't argue foolishly that india did so. I don't understand why you guys are always concerned about India. We are not here to compete India. We want to develop our country not to compete with anyone.

 

[My-Analogous]

Yeah, read your post again whose moral was "Let people believe the lies to protect national interest because it happened in India too".

Second thing, Don't include my leader into it as it is not the matter of concern. You better think first what is your national interest and don't argue foolishly that india did so. I don't understand why you guys are always concerned about India. We are not here to compete India. We want to develop our country not to compete with anyone.

Your leader is nothing and have no moral values and he is teaching others moral values that it self is bullshit. As per Islamic criminal justice his punishment is stoning till death. Can he ready to obey that?. I am Muslim and i don't worships peoples like Nora, Altaf, IK, Zardari and others. My assessment of judgement is based on Quran and Hadith and that is the ony way to judge peoples and that what our Prophet teach us.

Second: If your leader is that much good then asked him to release data of KPK gdp growth which he never will because of shame and then we talk.