Twirp: Terrorist Wahabi Islamic Rep Pakistan 4

[Naresh]

<b>Economy shows negative growth in dollar terms</b>

<i>* Experts point at fudging figures</i>

KARACHI :<b> Pakistan’s economy has shown negative growth in dollar terms owing to the depreciation of rupee against the greenback and experts have said that the Gross Domestic Product (GDP) growth figures were fudged.</b>

The GDP grew by 2 percent during the current fiscal year, claims the government. This growth rate was achieved by revising the previous year’s GDP growth rate from 5.8 percent to 4.1 percents. Economists say that this revision has been done very late. “Normally the figures are revised within three to four months,” says Dr Shahid Hassan, a renowned economist. <b>“This is clear evidence of fudging : either the growth rate of 5.2 percent was fudged or the revised rate is fudged,” he added.</b>

Regarding the performance of the economy, he says: “This performance can be summed up in one word—disastrous.” Shaukat Tareen, the advisor to the PM on finance, had admitted during May this year that the 2.37 percent GDP growth estimate for current fiscal year worked out by the Federal Bureau of Statistics and endorsed by National Accounts Committee was fudged as they had not included the largest ever negative growth witnessed by the large-scale manufacturing. The government released the Economic Survey of Pakistan on Thursday, which did not mention the contraction of economy in dollar terms. <b>Nor did it say anything about the “methodology” according to which the growth rate of 2 percent was achieved.</b>

<b>The GDP growth declined to 2 percent in the current fiscal year from an average of 7 percent in the past six years. “This would have come in even lower, at 0.4 percent, had officials not revised the GDP numbers for the previous fiscal year,” says Sayem Ali, Country Economist at the Standard Chartered Bank. The economy shrank to $161 billion in FY09 from $165 billion in FY08, reflecting the 18.4 percent decline in the value of the Pakistani rupee (PKR) in the last 12 months.

However, with GDP growth at three percent and inflation at nine percent the economy is expected to grow in dollar terms for the next fiscal year as the rupee is expected to remain in the band of Rs 84 to Rs 86 a dollar, which is five percent depreciation only.</b> The saving grace for the economy has been the positive performance of the agricultural sector which expanded by 4.7 percent on account of bumper wheat and rice crops. Higher support prices and water availability have helped to improve farm output and support more than 2.2 million workers involved in the rural economy.

Regarding the medium-term future of the economy, Ali says that persistently high inflation, tough measures taken under the IMF programme, and the rising security-related expenditure are weighing heavily on the economy. The economy is slowing to a near-halt, he says. “Pakistan’ economy is slipping into recession,” he says. “The policy fous needs to shift from stabilisation to growth in order to avoid this situation.” The government went to the IMF for a $7.6 billion loan in November 2008 as it faced a balance-of-payments crisis and quick depletion of foreign exchange reserves. The subsequent build-up of forex reserves and a stable rupee have helped to bring down inflation and allow the government to meet its external debt obligations. saad khan

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