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1. NATIONAL INCOME ACCOUNTS
OF PAKISTAN

2. NIAs of Pakistan
• In Pakistan, NIA are prepared and
released by the Federal Bureau of
Statistics. The coverage is on National
basis and Annual data.
• GDP is measured through Product
Approach and Expenditure Approach.
• The latest information is available for
FY 2008-09.
• The NIAs are prepared on current and
constant prices (to be explained)

3. Measurement of GDP
Product Approach
• The Gross Domestic Product at current factor
cost is derived by summing up the value added
in the following major sectors and sub-sectors of
the economy:
– Agriculture
• Crop Sector
• Non-crop Sector
– Mining and Quarrying
– Manufacturing
• Large Scale Remember!!!!!
• Small and Household GDP (at Factor Cost) = ∑ VAs
• Slaughtering
– Construction
– Electricity and Gas Distribution
– Services (six in number)

4. Measurement of GDP
Expenditure Approach
• The Gross Domestic Product at current
market price is derived by adding
expenditure on the following major heads:
– Consumption
• Private
• General Government
– Investment
• Gross Fixed Capital Formation
• Changes in Stock (Inventory Accumulation)
– Exports of Non-factor Services
– Imports of Non-factor Services
• Gross Domestic Product (at market price) = Consumption +
Investment + Exports (G&S) – Imports (G&S)

5. Price Indexes
• To measure inflation, which is the rate of change of
prices, we need the concept of a price index.
• A price index is a measure of the average level of
prices for some specified set of goods and
services, relative to the prices in a specified base year.
Another term for price index is deflator.

6. Price Indexes
• A Variable-weight price index starts with the set of
goods and services produced in the current period
and compares today’s cost of those goods and
services with what they would have cost in the base
year. More precisely:
• Variable-weight price index =
value of current output at current prices
value of current output at base-year prices

7. Price Indexes
• The second type of price index is a fixed-weight index.
A fixed-weight price index measures how much a
fixed basket of goods costs relative to a base period:
• Fixed-weight price index =
Value of fixed basket at current prices
Value of fixed basket at base-year prices

8. Real versus Nominal
•
GDP can also be
The output of an entire economy
expressed in either of these two ways.
• Nominal GDP, also called current – dollar GDP, is the
dollar value of an economy’s final output measured at
current market prices.
• Real GDP, also called constant-dollar GDP, is a
measure of the physical volume of an economy’s final
production.

9. Real versus Nominal
•
GDP GDP by applying
Real GDP is obtained from nominal
the formula
• Real GDP = [Nominal GDP/ GDP Deflator]
– Where the GDP deflator is a price index that measures
the average level of prices of goods and services
included in GDP.
• The components of
GDP, consumption, investment, and government
purchases can also be expressed in nominal or real
terms, and each component has its own deflator.

10. Example of Price
•
Deflator
The Ratio of GDP at current price to GDP at
Constant price (or base-year price) gives the
value of GDP Deflator – an aggregate index of
price level.
PGDP = [GDP at Current Price/ GDP at Constant
Price]*100
PGDP 07-08 = (9906/5493)*100 = 180.3
PGDP 06-07 = (8257/5192)*100 = 159.0
Inflation = [(180.3 – 159)/159]*100 = 13.4%

11. Example of Price
•
Deflator
The Ratio of GDP at current price to GDP at
Constant price (or base-year price) gives the
value of GDP Deflator – an aggregate index of
price level.
PGDP = GDP at Current Price
GDP at Constant Price
PGDP 07-08 = (9906/5493)*100 = 180.3*100
PGDP 06-07 = (8257/5192)*100 = 159.0
Inflation = [(180.3 – 159)/159]*100 = 13.4%

12. Agriculture Sector
(Value Added at Current Factor Cost)
Sub-Sectors FY 06-07 FY 07-08 Growth Share in
(Rs. Bn) (Rs. Bn) (%) GDP (%)
Major Crops 584.2 696.1 19.2 7.1
Minor Crops 194.6 221.5 13.8 2.4
Live Stock 881.7 1031.8 17 10.9
Forestry 35.1 44.3 26.4 0.3
Fishing 22.5 23.1 3 0.2
Total 1698 2017 18.8 20.9

13. Agriculture Sector
(Value Added at Constant Factor Cost of 1999-
2000)
Sub-Sectors FY 06-07 FY 07-08 Growth Share in
(Rs. Bn) (Rs. Bn) (%) GDP (%)
Major Crops 400.8 388.9 -3 7.1
Minor Crops 124.9 131 4.9 4.9
Live Stock 577.4 599.2 3.8 3.8
Forestry 16.6 18.4 10.8 11
Fishing 12.4 11.3 -8.9 -8.5
Total 1132 1149 1.5 1.5

14. Implicit Price Deflators and
Inflation: Agriculture Sector
Economic Survey 2007-08
Current Price Constant Price Deflator
Sub-Sectors FY 06-07 FY 07-08 FY 06-07 FY 07-08 FY 06-07 FY 07-08 Inflation
(Rs. Bn) (Rs. Bn) (Rs. Bn) (Rs. Bn) (%)
Major Crops 584.2 696.1 400.8 388.9
145.8 179.0 22.8
Minor Crops 194.6 221.5 124.9 131
155.8 169.1 8.5
Live Stock 881.7 1031.8 577.4 599.2
152.7 172.2 12.8
Forestry 35.1 44.3 16.6 18.4
211.4 240.8 13.9
Fishing 22.5 23.1 12.4 11.3
181.5 204.4 12.7
Total 1698 2017 1132 1149
150.0 175.5 17.0

15. Industrial Sectors
(Value Added at Current Factor Cost)
Sub-Sectors FY 06-07 FY 07-08 Growth Share in
(Rs. Bn) (Rs. Bn) (%) GDP (%)
M&Q 251.7 306.7 21.8 2.5
Manufacturin 1566.1 1892.8 20.9 18.9
g
Large S Mfg 1148.4 1404.2 22.3 13.3
Small S Mfg 279.9 331.6 18.5 4.4
Slaughtering 137.8 157.0 13.9 1.3
Construction 213.7 277.1 29.7 2.7
E & G Distn 165.2 158.6 -4.0 1.7
Industrial 25.9
Sector

16. Industrial Sectors
(Value Added at Constant Factor Cost)
Sub-Sectors FY 06-07 FY 07-08 Growth Share in
(Rs. Bn) (Rs. Bn) (%) GDP (%)
M&Q 132.3 138.8 4.9 2.5
Manufacturin 987.6 1040.9 5.4 18.9
g
Large S Mfg 694.8 728.4 4.8 13.3
Small S Mfg 223.3 240.1 7.5 4.4
Slaughtering 69.4 72.3 4.2 1.3
Construction 127.6 147.0 15.2 2.7
E & G Distn 110.1 93.9 -14.7 1.7
Industrial 1357.5 1420.5 4.6 5493
Sector

17. Implicit Price Deflators and
Inflation: Industrial Sector
Current Price Constant Price Deflator
Sub-Sectors FY 06- FY 07- FY 06- FY 07- FY 06- FY 07- Inflation
07 (Rs. 08 (Rs. 07 (Rs. 08 (Rs. 07 (Rs. 08 (Rs. (%)
Bn) Bn) Bn) Bn) Bn) Bn)
M&Q 251.7 306.7 132.3 138.8 190.2 221.0 16.1
Manufacturi
1566.1 1892.8 987.6 1040.9 158.6 181.8 14.7
ng
Large S Mfg 1148.4 1404.2 694.8 728.4 165.3 192.8 16.6
Small S Mfg 279.9 331.6 223.3 240.1 125.3 138.1 10.2
Slaughtering 137.8 157 69.4 72.3 198.6 217.2 9.4
Construction 213.7 277.1 127.6 147 167.5 188.5 12.6
E & G Distn 165.2 158.6 110.1 93.9 150.0 168.9 12.6

18. Services Sector
(at current factor cost)
2006-07 2007-08 Growth Share in
Services (Rs. Bn) (Rs. Bn) (%) GDP (%)
Transport Storage &
Communication 1,030 1,174 14.0 11.9
Wholesale & Retail Trade 1,433 1,760 22.8 17.8
Finance & Insurance 452 583 29.0 5.9
Ownership of Dwellings 206 236 14.4 2.4
Public Admin & Defence 458 578 26.1 5.8
Social Services 766 923 20.5 9.3
Total Services 4345 5254 20.9 53.0

19. Services Sector
(at constant factor cost)
2006-07 2007-08 Growth Share in
Services (Rs. Bn) (Rs. Bn) (%) GDP (%)
(%)Transport
Storage &
Communication 528 552 4.4 10.0
Wholesale & Retail
Trade 883 940 6.4 17.1
Finance & Insurance 305 357 17.0 6.5
Ownership of
Dwellings 141 146 3.5 2.6
Public Admin &
Defence 323 358 10.9 6.5
Social & Community
Services 522 571 9.4 10.4
Total Services 2,703 2,923 8.2 53.2

20. Implicit Price Deflators and
Inflation: Services Sector
Current (FC) Constant (FC) Deflator
Services 2006-07 2007-08 2006-07 2007-08 2006-07 2007-08 Inflation
Transport Storage & Communication 1030 1174 528 552 194.8 212.8 9.2
Wholesale & Retail Trade 1433 1760 883 940 162.2 187.3 15.5
Finance & Insurance 452 583 305 357 148.1 163.3 10.2
Ownership of Dwellings 206 236 141 146 146.6 162.1 10.5
Public Admin & Defence 458 578 323 358 141.8 161.3 13.8
Social Services 766 923 522 571 146.6 161.6 10.2
Total Services 4345 5254 2703 2923 160.7 179.7 11.8

21. Revisions/ Re-basing in Pakistan
• The earlier version of the UN System of National
Accounts (SNA) was published in 1953 and its
latest edition was completed in 1993.
• Adoption of UN SNA ensures consistency of
estimates and allows meaningful international
comparison.
• Besides proving measures of production,
income, consumption, savings, capital formation
and their financing for individual sectors and for
the economy, it also provides linkages with
various monetary and quantitative databases
through satellite accounts.

22. Revisions/ Re-basing in Pakistan
• The first estimates of NIA of Pakistan were prepared
in 1949 by Economic Advisor’s Office.
• The task was the entrusted to CSO which has now
become FBS.
• Two earlier efforts in 1960s (NI Commission
1963, and IBRD Statistical Mission 1969) resulted into
significant headway with regard to timeliness, data
availability, coverage, and statistical techniques to
prepare estimates.
• The initiative to switch base from 1959-60 to 1969-70
could not materialize due to enormous
inconsistencies in the manufacturing data.
• The next attempt to revise base to 1975-76 also met a
similar outcome.

23. Revisions/ Re-basing in Pakistan
• The third attempt for re-basing to 1980-81
succeeded and the revision was completed in
1988.
• The most recent attempt to switch to a more
recent base of 1999-2000 was completed in
2003.
• As part of the job, a number of studies on all
sub-sectors of the economy were prepared by
the FBS staff as well as external consultants.
• The final document explaining in detail the
differences in 1999-2000 and 1980-81 accounts
is available on FBS website. It is an important
document for understanding the concept and
policy planning.

24. Comparative Position
1999-2000 1980-81 Base Percentage
Base Change
Agriculture 923,609 779,692 18.5
(26.2) (26.4)
Industrial 798,190 676,369 18.0
(22.6) (22.9)
Services 1807,546 1495,927 20.8
(51.2) (50.7)
GDP (Rs. Million) 3529,345 2951,988 19.6
Figures in parentheses are shares in GDP

25. Repeated Revisions in GDP
(at current market prices)
GDP (MP) Data from Different Issues of the Economic Survey
FY 1999-00 2000-012001-022002-032003-042004-052005-062006-072007-08
1999-00 3,174 3,183 3,147 3,147 3,793 3,793 3,826 3,826 3,826
2000-01 3,472 3,416 3,423 4,163 4,163 4,210 4,210 4,210
2001-02 3,727 3,629 4,402 4,402 4,453 4,453 4,453
2002-03 4,018 4,821 4,823 4,876 4,876 4,876
2003-04 5,458 5,533 5,641 5,641 5,641
2004-05 6,548 6,581 6,500 6,500
2005-06 7,713 7,594 7,623
2006-07 8,707 8,723
2007-08 10,478
End of Lec 4 and 5

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