April 5, 2019 (MLN): Pakistan Bureau of Statistics (PBS) has gotten itself in hot water for allegedly reporting incorrect inflation figure for the month of March, by using a faulty calculation methodology.
The government has been scrutinizing the authenticity behind the calculation methodology used by the national data collecting agency, especially after it faced immense criticism from the public as inflation figure stroked a five-year high.
Finance Minister Asad Umar told The Express Tribune that the figure of 9.4% reported by the PBS, which was at least 1.2 percentage points higher, was a result of an incorrect methodology.
The incorrect estimation of inflation can result in serious repercussions for the economy, as it acts as a basis for the determination of policy rate.
What’s eerier is that the State Bank Pakistan hiked interest rates by 50bps in spite of a decrease in core inflation. This was perceived by many as a suspicious move, with some even believing it to be a part of IMF condition
The Economic Coordination Committee, in its meeting held on Wednesday, expressed discontentment over the poor presentation given by the PBS. To correct the situation, ECC has established a sub-committee to look into the inflated inflation reading. The committee would review all areas related to inflation and give its report to the prime minister on Monday.
It is pertinent to mention that PBS is still showing the original data on its website in spite of these allegations.
