Economic Survey with ‘outdated’ data gives false narrative of economy hard hit by coronavirus

Published On: May 27, 2020 07:04 PM NPT By: Sagar Ghimire  | @sagarghi

The report cannot be different this year because of the pandemic, said spokesperson at MoF.

KATHMANDU, May 27: The government unveiled the Economic Survey of the current fiscal year 2019/20 on Tuesday, its assessment of the performance of the country's various economic and financial indicators. But, reading this report in the end of May will take you back to mid-March, and gives you a false sense that the country's economy has been doing fairly well.

The assessment does not accurately reflect the current economic scenario as the data derived for the assessment are as of Falgun last year (mid-March) when the coronavirus was yet to make a dent on the economy.  

The coronavirus has impacted almost all the economic indicators from mid-March, but the government's latest economic assessment risks giving a false impression about the economic condition of the country, say experts.

"Those reading the survey report end up getting information that is of little or no relevance at this point. The ministry has carried on its tradition of preparing the report based on outdated data that is convenient to collect instead of leveraging the technology to get an updated picture of the economy," Nara Bahadur Thapa, a former chief of the Research Department at the Nepal Rastra Bank, told Republica Online.  

"Why is the Economic Survey needed? Because, the budget is prepared based on the economic survey. It analyzes the overall economic condition and the budget is formulated accordingly. Reading the report before the budget should help you understand the type of budget that is going to be introduced," said Thapa. "But, this practice followed by many countries, including India, is not the same for Nepal due to inconsistencies between the Economic Survey and the budget," he added.  

For many analysts, the survey report reflects the 'laziness' of the finance ministry's staff who do not want to make an effort to collect and analyze the latest economic figures that are already available.

"The economic picture by the Economic Survey is incomplete at best and misleading at worst," Gokarna Awasthi, an economic analyst, told Republica. "The current Finance Minister is an economist, and even he did not ditch the tradition of presenting the survey that relies on figures that are three months old. Gone are the days when data were either very scarce or the process was time consuming," said Awasthi, who had also worked as a business journalist for nearly two decades.

"Taking Falgun as a cut-off date for the Economic Survey at this point does not make sense. This assessment causes confusion during this rapidly changing situation due to the pandemic," he added.

Though Minister for Finance Yuba Raj Khatiwada wrote in foreword of the report that measures to stop the spread and control of coronavirus could seriously impact economic activities, the 362-page-long report assesses and explains the economic indicators of the country before the coronavirus pandemic.  

Most of the data that the Economic Survey comprises were already in the public domain. For example, Nepal Rastra Bank--country’s central bank--had released data about the financial sector, like inflation and money supply a few weeks ago. Foreign trade statistics based on the tenth month of the current fiscal year have already been released by the Customs Department. Similarly, there are sectors like the capital market which provide real time data or budget status that comes as a daily update from the Financial Comptroller General Office.

However, the survey report picks the growth projection of the GDP--value of total goods and service output--that was released a month earlier after factoring in the impact of the COVID-19.

Spokesperson of the Finance Ministry says that the practice of releasing the Economic Survey report based on data of eight months is not new. "This is not the first time we have done this. The survey report is based on eight months of the fiscal year. The report cannot be different this year because there is pandemic," said Uttar Kumar Khatri, a spokesperson at MoF.

"For any analysis, we have to take a cutoff date. We have been taking the eighth month of a fiscal year because that's the latest data we have at our disposal when we start preparing the report," he added.

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