A system of
national accounts consists of a coherent, consistent and interrelated set of
economic accounts for sectors or sub-sectors of the economy as a whole. It
provides a set of concepts, definitions and classifications within a broad
accounting framework. It is designed for purposes of economic analysis and
policy-making, including the formulation and monitoring of economic programmes
and development planning. Data of a scientific, technological or social nature
can be systematically related to economic data within the framework of an
overall system of accounts.
Pakistan, the national accounts are prepared as per guidelines provided by the
United Nations System of National Accounts (UNSNA). The
first United Nations System of National Accounts (SNA) was published in 1953.
The UN recommended countries to compile their economic accounts within the SNA
framework to achieve consistency and facilitate international economic
comparison. SNA has been revised
several times to take account of these wider concerns. The latest version of the
system was completed in 1993 and provides measures of production, income,
consumption, savings, capital formation and their financing for individual
sectors and for the economy as a whole. SNA
is a powerful and flexible tool to provide the detailed economic information
required to meet analytical and policy needs.
estimates of national accounts of Pakistan were prepared by the Economic
Advisor’s Office in 1949. On the
setting up of the Central Statistical Office (CSO) in 1950, the job was
transferred to CSO, now Federal Bureau of Statistics (FBS). Since then the FBS
has been preparing different series of national accounts at current and constant
For improvement of
national accounts, several groups and committees were set up from time to time,
the prominent being the National Income Commission-1963 and IBRD Statistical
Mission-1969. As a result the national accounts of Pakistan have undergone
modifications and improvements at various stages with respect to timeliness,
data availability, coverage and statistical techniques involved in their
computation. In 1972-73, FBS
undertook an exercise for switching over the base from 1959-60 to 1969-70. These
estimates were presented before the National Accounts Committee but could not be
adopted due to inconsistencies in the estimates of manufacturing sector. The
Committee directed the FBS to prepare estimates with 1975-76 base.
The estimates with base 1975-76, on improved data availability, concepts
and methodology were prepared for the year 1975-76 through 1983-84 and presented
before the Committee but could not be adopted by it due to persistent
inconsistencies. Despite successive
efforts for the improvement of national accounting in Pakistan, the desired
results have not been achieved. In particular the revised UN System of National
Accounts–1968 could not be implemented even though nearly two decades have
elapsed since their adoption. During
the year 1984-85, the NEC decided to shift the base to 1980-81.
Accordingly a Committee on National Accounts was constituted to review
the present methodology for preparation of National Accounts and to propose
improvements considered necessary by the Committee. The result was the 1980-81
base completed in 1988.
Efforts were made
from time to time to shift the base from 1980-81 but due to one reason or the
other, the work was postponed. Finally,
in 2003, the NAC decided to shift the base year from 1980-81 to 1999-2000.
Estimation of GNP/GDP:
GDP in Pakistan is
estimated as per guidelines provided by the SNA. For the purpose of GDP
estimation by sectoral activities (current & constant prices), product,
income and expenditure approaches are applied. The economy is divided into the
Gas and Water Supply
Storage & Communications
& Retail Trade
Administration & Defence
Social & Private Services
is computed by a combination of product, income and expenditure methods.
Product method is applied to compute value added in agriculture, mining
and quarrying, manufacturing, electricity & gas distribution, wholesale
& retail trade and ownership of dwellings whereas income method is used to
work out income accruing from transport, storage & communication, finance
and insurance, public administration & defence and services sectors.
Expenditure method is used to estimate value added in construction on the basis
of investment made and the co-efficient of value added relating to investment.
mining and quarrying; manufacturing; electricity and gas distribution;
wholesale and retail trade; and ownership of dwellings.
storage and communication; finance and insurance; public administration
and defence; and service sector.
to estimate value added in construction on basis of investment made and
the co-efficient of value added relating to investment.
Fixed Capital Formation (GFCF):
per system of national Accounts SNA 1993 the gross fixed capital formation is
measured by the total value of a producer’s acquisitions, less disposals of
fixed assets during the accounting period plus certain additions to the value of
non-produced assets realized by the productive activity of institutional units.
Fixed assets are tangible or intangible assets produced as outputs from
processes of production that are themselves used repeatedly or continuously in
other processes of production for more than one year.
estimates of GFCF in Pakistan are primarily constructed separately for private
and public sectors by economic activity as well as by capital assets. It
comprises expenditure incurred on the acquisition of fixed assets, replacement,
additions and major improvements of fixed capital viz. land improvement,
buildings, civil and engineering works, machinery, transport equipment and
furniture and fixture. The methodology used to estimate GFCF in private and
public sectors including general government is given in the succeeding
Estimates of private sector are computed by a combination of approaches i.e.
commodity flow approach, expenditure approach (Survey Method) and financial
approach. Commodity flow approach that uses the net availability of capital
goods in value terms from domestic production and imports and exports, duly
adjusted for various margins, is applied to the following three sectors.
approach (Survey Method) is applied to the following sectors:
Mining & Quarrying
Large Scale Manufacturing (In-Production)
Small & Household Manufacturing Industries
Wholesale & Retail Trade
Financial Corporate Sector
Ownership of Dwellings
approach is used to estimate GFCF in under-construction large scale
manufacturing establishments, livestock farming, poultry farming and fishing
supplemented by survey method.
The estimates of gross fixed capital formation in the public sector are compiled
on the basis of data received from all the autonomous institutions by
sub-sectors of the economy.