THE new data on large industry output reinforces the impression that the government might have ‘pressured’ the National Accounts Committee into manipulating key economic numbers to show positive growth during the present fiscal. The delay in compiling key output data ahead of the FY24 budget announcement had triggered speculation that the government might be prodding the Pakistan Bureau of Statistics to ‘fudge’ the numbers amid projections of negative growth. Hence, GDP growth is estimated at 0.3pc against independent projections of a contraction of up to 2pc to 3pc, premised on the fact that the industrial sector remains the main driver of growth and that the present economic crisis is being driven largely by contracting large-scale manufacturing output due to import curbs to prevent dollar outflows and avoid default.

The new PBS data shows that LSM shrunk by over 21pc in April for the tenth month running; 20 out of 22 sectors declined because of economic uncertainty and political turmoil. Besides import restrictions, high energy costs, currency depreciation and expensive credit have also contributed to the LSM contraction. Many factories have shut down or slashed their output and retrenched workers in order to cope with the unprecedented balance-of-payments crisis. Overall, the data points to negative growth or a contraction of 9.4pc in the period July-April from a year ago. The contraction in the first nine months was recorded at 8.1pc. Therefore, doubts over the veracity of key official economic data for the ongoing year, as well as estimates and targets announced for the next one, aren’t without reason. This will further hurt the government’s credibility.

The present crisis is not going away anytime soon. Investors are nervous and trying to cut their losses. Finance Minister Ishaq Dar’s recent outburst against the IMF following its criticism of a fiscally careless budget may have pushed Pakistan even further away from a bailout deal with the lender. Indeed, Pakistan is a sovereign country and cannot accept everything the lender demands, as stated by Mr Dar on Thursday. Yet blaming the delayed revival of the deal on geopolitics is misplaced. If there is anyone to blame for derailing the IMF programme it is the minister himself. ‘Geopolitics’ is a far-fetched conclusion and would make friendly countries such as China and Saudi Arabia a part of that conspiracy. His public outburst against the IMF will not help us. Indeed, China has helped us survive through the last few months. But it would be unrealistic of us to expect Beijing or any other capital to replace the IMF. Mr Dar needs to stop blowing hot and cold where the IMF is concerned, and come up with a credible plan to get the economy out of this mess. Or he should give up his portfolio.

Published in Dawn, June 17th, 2023