Get the latest news and updates from Dawn
THE fiscal year that just ended has brought real GDP growth of 3.7 per cent — the fastest in four years. Yet ask the median household and the answer will not match the national accounts. Both are telling the truth. The distance between them is the most consequential number in Pakistani economic policy — and we do not officially measure it.
Call that missing number ‘welfare GDP growth’: what expansion actually reaches households, rather than what is produced within our borders. Four honest adjustments bridge the two. First, population — shared across ever more people, 3.7pc becomes barely 1.2pc per head. Second, income versus production — GDP is essentially blind to the $42 billion that our workers abroad send home each year. In contrast, the gross national disposable income, which is the truer measure of welfare, runs nearly a tenth above GDP. Third, distribution — growth led by corporate profits and financial assets accrues to those at the top, while the poorer half’s wages have not recovered from the inflation shock. Fourth, the prices that people experiencing poverty actually pay — food and energy claim over half their budget, so whenever food inflation outruns the headline index, official statistics flatter their condition.
