This dissertation takes on some important issues related with national accounts of
Pakistan including (a) re-estimation of past series of national accounts (prior to the
year 1999-00) to make it consistent with the new official series for years 1999-00
onward at new base year prices; (b) quarterisation of annual series of national
accounts to remove one of the major stumbling block in research by making available
high frequency data, (c) estimation of provincial accounts with new base year prices,
and (d) estimation the contribution of total factor productivity (TFP) to economic
growth with the new series of gross domestic product and its sub-sectors.
Thus by embarking upon the above mentioned issues, the dissertation contributes to
the economic literature in the following respects:
i) It provides a new set of national accounts at 1999-00 prices as well as at
current prices for a period from 1970-71 to date consistent with the new
official estimates for recent years.
ii) It gives quarterly data of GDP and all its sectors/sub-sectors both at constant
prices of 1999-00 and at current prices.1
A by-product of this exercise is
quarterly GDP deflator (with 1999-00=100) which was earlier not available in
Pakistan.
iii) It presents estimates of provincial GDP and all its sectors/sub-sectors covering
all the provinces in a consistent framework.2
iv) It provides series of gross fixed capital formation and capital stock estimated
at disaggregated level and at prices of 1999-00.
v) It estimates contribution of TFP, capital and labour to the growth of GDP and
its sectors/sub-sectors (growth rates of new series at 1999-00 prices).
In its attempt to re-estimate the previous series at new base of 1999-00, the
dissertation followed, to the extent possible, the same methodology as of the FederalBureau of Statistics (FBS). Rather, it has improved upon FBS methodology in case of
some sub-sectors including livestock and slaughtering by re-estimating population of
different animals and the number of animals slaughtered with more logical techniques
(detail discussion in chapter 4).
For quarterization of national accounts, maximum information available in official
sources or in different studies have been used which include: harvest calendars of all
major crops and most of the minor crops (with province level detail); seasonal
patterns of milk production, fish catch, and timber; quarterly production of different
minerals, manufacturing goods, and cement (for construction activities); seasonal
pattern of utilities consumption; quarterly imports and financial indicators like M2;
etc. Moreover, mechanical technique of quarterisation as proposed by Lisman and
Sandee (1964) has also been used in case of some sub-sectors like Transport, storage
& communication, ownership of dwellings and other services.
The provincial distribution of national accounts have been done by using some related
indicators; however, provincial value added for sectors like crops, fishing, and mining
& quarrying have been estimated directly by product approach just like national
accounts.
In order to estimate the contribution of total factor productivity to growth, the
dissertation has undertaken a detailed exercise of estimating the capital stock at
constant prices of 1999-00 and skill-adjusted labour force – both the inputs for all
sub-sectors of GDP. The non-parametric approach as suggested by Solow has been
used in factorization of overall GDP growth as well as growth in all sub-sectors.
The results show that the series of national accounts estimated by this dissertation are
fairly close to the official series for years 1999-00 to 2004-05, which gives a
confidence to estimates of this dissertation for series prior to 1999-00.
It has been found that on average 21.8 percent of the annual GDP is produced in the
first quarter (Jul-Sep) followed by the third quarter (Jan-Mar) with 25.2 percent of
annual GDP. In the second quarter (Oct-Dec) the production of goods and services is
vi
the highest at 26.9 percent. In the last quarter (Apr-Jun) production is also high with
26.1 percent of the annual.
The provincial distribution of gross domestic product shows that the Punjab holds the
highest share in gross domestic product (52.3 percent); it is followed by Sindh (30.6
percent), NWFP (11.5 percent) and Balochistan (5.5 percent). However, over the
years the Punjab’s share has declined: during 1970s, about 54 percent of the country’s
GDP was being generated in the Punjab that declined to 51.8 percent in 2000s. On the
other hand, shares of NWFP and Balochistan in total GDP have increased during this
period; there is no significant change in the share of Sindh in total GDP during the
period of 1970-2005.
The results of growth accounting exercise shows that average contribution of total
factor productivity to GDP growth during the period 1970-2005 had been 1
percentage point. It was higher in 1970s and early eighties and remained below 1
percent in subsequent years with negative growth during the periods of late 1980s and
late 1990s. However, resurgence in total factor productivity growth has been
witnessed in recent years. Comparing the relative contribution of capital and labour,
the results show that labour remained the biggest contributor to economic growth
during 1970-2005; however, in recent years, capital contribution has surpassed the
labour contribution.