1. General Recommendations

Recommendation 1: Pursue the initiative to give more autonomy to the FBS and conduct public awareness exercises aimed at improving the public perception of the FBS

A proposal for creation of a single, fully professional, dynamic and autonomous statistical organization through merger of Technical Wing of Statistics Division, FBS, PCO and ACO as a step forward towards restructuring /reorganization of federal statistics system, submitted to the Government, is being pursued. Hopefully, this process will be completed during 2005. As far as public awareness is concerned, data users—producers meetings and workshops and press briefings are being held. With the launching of a website of the Statistics Division, a large number of citizens, students, researchers, etc. are visiting the website on daily basis. To further improve public awareness, meetings with private sector through different Chambers of Commerce and Industries and associations are being held.

Recommendation 2: Undertake actions to improve response rates for surveys, for example, by amending the General Statistics Act to increase the fines for not providing information.

This Division does not consider that increase in fines under the General Statistics Act, 1975 will work to improve the response rate for surveys. Help of CBR and relevant provincial departments is being sought to improve response rates in case of Large Scale Manufacturing Industries while response rate for Household Surveys is quite encouraging.

Recommendation 3: Undertake a review of statistical policies and practices in consultation with users, addressing at least the issues, i.e., presentation of statistical information (tables, text, charts, etc.), development of detailed metadata for all datasets, establishment of advanced release calendar, simultaneous release of data to all users, publicizing the availability of unpublished data, assisting users of official statistics by providing more detailed contact information.

Statistical policies and practices are reviewed by the National Statistical Council (NSC) from time to time. The restructured NSC/Federal Statistical Council (FSC) is expected to meet shortly to deliberate upon a number of statistical issues. Efforts are constantly under way to improve the presentation of data in various socio-economic fields. In this regard, the format of Pakistan Statistical Pocket Book, Monthly Statistical Bulletin, and other major statistical publications has recently been improved. Presentation of data in other publications is planned to be reviewed accordingly. Advance release calendar has already been put in place on the FBS website. All data are simultaneously being released to all users as well as being posted on the website to facilitate the users. Relevant contact information (names, e-mail, phone, fax, postal address, etc.) is being given on all publications while the same is also available on the website.

Recommendation 4: Increase staff training in statistical methodologies and modernize computer equipment.

Efforts are underway to enhance the training facilities for the staff and modernize the computer equipment. A project proposal on Capacity Building of the Statistics Division and its attached departments with the assistance of the World Bank has already been sent to the Ministry of Finance. Simultaneously, a proposal for assistance to improve the training capacity and computer equipment of Training Wing of the FBS has also been negotiated with the UNFPA.

Recommendation 5: Strengthen coordination among institutions to enhance inter-sectoral consistency of data.

All out efforts would be made to enhance inter-sectoral consistency of data through regular meetings between producers and users of data.

Recommendation 6: Update and enhance regularly the GDDS metadata posted on the DSBB for all sectors.

Updates are being done regularly by the FBS.

2. National Accounts

Recommendation 1: Increase the fines for noncompliance to FBS requests for data so that the legislation acts as an effective deterrent.

Views on this are already given above under general recommendation 2.

Recommendation 2: Formulate programs aimed at increasing public awareness of the need to provide accurate statistics on a timely basis.

Steps will be taken to increase the public awareness and responsibility for providing accurate and timely statistics.

Recommendation 3: Improve computing resources to allow the NAW to take advantage of modern software that could enhance data validation, improve the compilation process and increase efficiency. The improved computing resources would enable the FBS to receive government finance data electronically rather than in hard copy.

The process of advancing FBS electronic data capacity has been under constant consideration. Efforts such as lining up of German support for improvement of capacity of Regional/field Offices and National Accounts are under way to replace the outdated 386/486 personal computers with the latest ones and proper networking to enhance data validation and compilation process and increase efficiency.

Recommendation 4: Develop training programs to enhance the technical skills of staff. The FBS may wish to make greater use of the Training Wing for this purpose by inviting experts to conduct training programs for staff.

We agree with the recommendation. IMF may provide training to National Accounts staff on estimation of seasonality and smoothing of quarterly national accounts. Proposal for improving training capabilities of the FBS Training Wing are underway separately through a UNFPA program.

Recommendation 5: Discontinue the current practice of the National Accounts Committee to review the statistics before dissemination. This practice suggests external influence over the statistics and may imply that the national accounts are not compiled on an impartial basis.

The National Accounts Committee (NAC) is a technical advisory body for providing advice to FBS for regular improvement of national accounts estimates and in no way it creates any external influence on the statistical out come. The Committee mainly targets the improvement of data availability for national accounts.

Recommendation 6: Fill the vacant post of Director General as the non-appointment has led to uncertainty amongst staff and users. If the vacancy exists because of the impending plans to reorganize the FBS, then this should be communicated to staff and to the public.

With reorganization of the set-up, heads of organs will automatically come in place. All stake holders are aware of it. There is no uncertainty.

Recommendation 7: Initiate measures to broaden the range of accounts and tables currently being compiled. In particular, the following should be compiled: (a) Regular (preferably annual) supply and use tables that could be used to conduct consistency checks on the estimates; and b) accounts by institutional sector.

Both supply and use tables and institutional sector accounts would be developed by the FBS on annual basis for which capacity requirements are being worked out.

Recommendation 8: Improve coverage of merchandise trade. Efforts should be made to derive estimates of cross boarder trade not recorded by the customs authorities.

Presently no mechanism exists to catch the unrecorded cross-border trade. IMF’s technical assistance would be welcome to help the FBS develop the requisite methodology.

Recommendation 9: Implement procedures to estimate the non-observed economy. The procedures should target, in particular, informal activities that are significant in Pakistan.

IMF technical assistance would be welcomed for estimating the non-observed economy.

Recommendation 10: Formulate plans for the next rebasing exercise. The estimates should be rebased with a minimum frequency of five years. Thus, following the release of the new series at 1999/2000 series the estimates should then be rebased to 2004/05 at the latest.

We agree with the IMF recommendations for rebasing after every five years. However, the next data rebasing will be for year 2005-06 after which a five year cycle will be observed. This would require additional financial and manpower resources.

Recommendation 11: Derive independent estimates of private final consumption expenditure using the data from the HIES. The availability of such estimates would enhance the practicality of consistency checks and help improve the overall estimates.

Agreed with IMF recommendation. This will however be done on every other year as HIES data/Living Standards will be available on alternate years.

Recommendation 12: Improve the timeliness of the national accounts. The FBS should disseminate the estimates that are revised for government agencies six months after the end of the reference period.

Efforts are being made to prepare and release quarterly national accounts which will eliminate the issue of timeliness.

Recommendation 13: Quarterly surveys to produce data on:

3. Consumer and Wholesale Price Indices

Recommendation 1: The National classifications are used instead of the internationally recommended ones. Implement the planned introduction of the COIPOP as soon as possible.

This is a good recommendation and is under consideration.

Recommendation 2: The Family Budget Survey, which is the source of the weights for the CPI, has not been published. No adjustments are made to the results from the Family Budget Survey to resolve under reporting by households of certain types of expenditures.

Family Budget Survey was conducted in 2000-01. Its results are not published as the same are used only for change of base of CPI and SPI. Under reporting of expenditures was taken care of to the extent possible at the editing/coding stage of the Family Budget Survey. However, next survey will be published.

Recommendation 3: Review the treatment of Housing in the CPI, preferably by replacing the technique for estimating rentals on the basis of construction costs with an index reflecting the cost of purchasing and maintaining dwellings.

This is a good suggestion and we would welcome technical assistance from the IMF to handle house rent in CPI.

Recommendation 4: The CPI scope is limited to 52 urban centers (covering about 68 percent of all urban households), thus excluding households living in rural areas. Consider expanding the scope of the CPI to cover all urban areas (as allowed by the 2000/2001 Family Budget Survey), and eventually cover all Pakistan by including information on rural areas.

The CPI scope extends to 52 urban centers covering 68 percent of urban population (not 68 percent of households). Organized markets do not exist in the rural areas. Rural people purchase goods and services for consumption from nearby towns/small cities. Hence, small cities were covered in CPI.

Recommendation 5: WPI does not cover small scale manufacturing enterprises.

WPI covers large-scale as well as small-scale manufacturing enterprise.

1. Monetary Statistics

Recommendation 1: Compile and disseminate monetary statistics based on the data collected through the monthly report forms rather than the weekly statements provided by the Banking Supervision Department.

The Statistics Department has started compiling monetary survey on the basis of monthly statements of assets and liabilities since September 2004.

Recommendation 2: Implement the MFSM guidelines on the sectorization of institutional units, classification of financial instruments, and the recording of securities repurchase agreements (repos) and financial derivatives.

Sectorization of institutional units has been classified according to the guidelines of MFSM and will be implemented after the acquisition of data through data warehouse.

Recommendation 3: Incorporate accrued interest in the outstanding values of financial instruments, as recommended in the MFSM.

The issue will be resolved with the implementation of MFSM.

Recommendation 4: Enhance the existing data validation procedures to ensure that mutual claims between the SBP and scheduled banks are recorded consistently.

The problem of inconsistency has already been resolved and consistent data will be reported through the data warehouse, which will also be utilized for the compilation of a monetary survey according to the MFSM.

Recommendation 5: Improve the data capturing procedures for the SBP and banks’ weekly balance sheet information by using electronic means to enter these data into the database.

The monthly data used for preparation of monetary survey are acquired electronically and weekly data will also be acquired electronically after the implementation of data warehouse project.

Recommendation 6: Improve the timeliness of SBP data for end-fiscal year by using preliminary accounting records, not yet approved by the High Council, to avoid the currently long delays in the compilation and dissemination of SBP monetary statistics.

From June 2004, monetary survey was compiled using provisional data of SBP accounts, which were accordingly revised after finalization of the accounts.

Recommendation 7: Establish a regular mechanism to verify the consistency between monetary and government finance statistics.

We feel that the two set of data are consistent with each other as the source of the two is the same.

Recommendation 8: Inform users of SBP’s revision policy and practice and include a documentation of revisions in the statistical publications.

A proper revision policy document for all major data series compiled in the department is under preparation. Draft of the policy will be ready by December 2004. The policy document and practices of revisions will be made available to the general users.

Recommendation 9: Publish monetary data in a clear manner, especially by improving the clarity of the tables, to facilitate accurate interpretation and analysis (e.g., publish foreign liabilities and disaggregate the nonpublic sector in line with the MFSM guidelines).

Table of analytical accounts of SBP and scheduled banks is being published in the Monthly Statistical Bulletin consistent with the guidelines of MFSM.

Recommendation 10: Publish comprehensive metadata on the concepts and methodology used to collect and compile monetary statistics.

Metadata has been disseminated on the Dissemination Standards Bulletin Board (DSBB) of IMF and links have been provided in the SBP website.

Recommendation 11: Increase resources dedicated to training in the monetary statistics methodology and compilation methods, including international statistical guidelines.

This is the internal issue of SBP and should not be part of the report. The SBP has a transparent policy for training of its employees

Recommendation 12: Identify contact points for enquiries by mail, telephone, facsimile, or by e-mail.

Contact points of all data posted on the website are provided.

2. Balance of Payments

Recommendation 1: Compile data on the external transactions of enterprises operating in the EPZ and offshore banks and treat them as residents of Pakistan.

The issue of data relating to enterprises operating in EPZ still needs to be resolved due to some legal complications as in most other countries.

Recommendation 2: Disaggregate the counterpart of exports of crude oil under product sharing agreements into (i) an income component, to be classified in the direct investment income account and (ii) a component for the repatriation of direct investment capital, to be classified in the account for foreign direct investment in Pakistan of the financial account.

SBP is working on acquiring necessary data from the oil exploration companies which will enable us to properly classify data on export of crude oil according to the above recommendations.

Recommendation 3: Strengthen the procedures to estimate reinvested earnings to include, in addition to earnings capitalized in various other reserve accounts.

Data on reinvested earnings and retained earnings will be collected under the foreign investment survey. The survey questionnaire has been revised for this purpose.

Recommendation 4: Reclassify the government guaranteed loans from the general government sector to the sector of the beneficiary of the loan.

The government guaranteed loans from the government sector to the sector of beneficiary has already been reclassified as per recommendations of the ROSC.

Recommendation 5: Conduct revision studies.

Revision studies will be conducted after the formulation of the revision policy which is under preparation.

Recommendation 6: Develop and disseminate an advance release calendar.

The advance release calendar in respect of BOP has been prepared and posted on the SBP website.

Recommendation 7: Establish regular procedures to verify consistency between BOP and GFS.

The matter has been taken up with Ministry of Finance (budget wing) and EAD. In the future, the government finance data will be reconciled with EAD (BOP) source before its release.

Recommendation 8: Improve assistance to users by providing more detailed contact information in the publications and on the website.

To facilitate users, contact points of all data posted on the website are provided.