The State Bank of Pakistan (SBP) revised the previous year’s current account deficit upward to $ 4.4 billion – an unusually large change of 50% from preliminary figures, due to a previous underreporting of imports and loans for a public sector company.
The latest balance of payments summary the central bank released over the weekend revealed that the SBP previously incorrectly reported the current account deficit for the 2019-20 fiscal year, which ended in June of Last year.
The revised current account deficit for the previous year was $ 4.44 billion, or 1.7 percent of gross domestic product (GDP), according to the central bank.
Pakistan’s Tehreek-e-Insaf (PTI) government and SBP both said the deficit fell from $ 13.4 billion to just under $ 3 billion in the last fiscal year.
Even in its latest staff report released this month, the International Monetary Fund (IMF) cited Pakistan’s current account deficit at nearly $ 3 billion for the last fiscal year. But the latest summary showed that the current account deficit of $ 3 billion was underestimated by $ 1.5 billion or 50%, official statistics showed.
This is an unusually large discrepancy between provisional and revised figures, which justifies a complete overhaul of the government’s data reporting mechanism in addition to ensuring better coordination between the various state bodies.
The difference was not due to data integrity issues, but rather late or inaccurate reporting of some of the foreign transactions, a senior federal government official said.
The SBP did not respond to the request for comment until the story was filed.
Pakistan narrowly avoided IMF censorship and sanctions last month over the reporting of inaccurate data. In the April 2019 data exchange with the IMF, the government did not declare Rs 357 billion of sovereign guarantees to the global lender, which was issued in 2015-16.
These figures were already in the public domain and had been reported by The Express Tribune at the time.
“New information brought to the attention of the (Pakistani) authorities and shared with staff revealed that data on government guarantees dating back to FY16 has been inaccurately reported,” said the IMF in March.
The latest SBP data showed that unlike previously reported merchandise imports of $ 42.4 billion, imports actually amounted to $ 43.6 billion, a gap of $ 1.2 billion or 2 , 9%.
Likewise, imports of services were also revised upward, from $ 8.3 billion to $ 8.8 billion, an adjustment of 5.9%.
The central bank has also made an upward adjustment to previously released figures on net borrowing. From the previously reported $ 2.7 billion in net borrowing, the central bank revised the number up to $ 4.2 billion – a difference of $ 1.5 billion or 55%, according to the news. abstract.
The figure for the net increase in liabilities has also been revised upwards by more than 30% to $ 7 billion. The central bank had underreported other sector disbursements by $ 1.5 billion.
The revised figures showed that disbursements stood at $ 3.5 billion against the previous figure of $ 2 billion, a gap of 77%.
Sources said the authorities had already made adjustments to the public and government guaranteed external debt from the previous year to show consistency in the data.
The difference is due to the underreporting of foreign loans taken on the balance sheet of a public sector company, which was building power plants with foreign capital.
They said it also led to adjustments in import figures, as payments for machinery and installations had been made overseas, which were now reflected in government figures.
For this fiscal year, some minor adjustments to the current account deficit were also made.
In the current fiscal year, the current account remained in surplus at $ 959 million for the first nine months (Jul-Mar). There was an improvement of about $ 5 million in the current account.
Exports of goods and services increased by 2% in July-March 2020-21 compared to the same period last year. In contrast, imports of goods and services increased by 4%. As a result, the trade balance in goods and services deteriorated by nearly $ 1 billion.
Posted in The Express Tribune, April 28e, 2021.