Pada’s manipulation of GDP figures !

Our Pada is bragging that Mauritius is one of the few countries in the world to have improved its growth forecasts. “In 2023, the IMF had forecast growth of 5%, but we have achieved growth of 7%…"

But Pada should also be telling us that we are one of the few countries where published data from its Central Bank (BoM's BoP 2023) differs markedly from that of its Statistics Office .(SM's Table 11 of the NA March 2024).

Much of the improvement of our growth forecasts is due to some doubtful accounting and estimates. That’s the “gestion economique” á la Pada and our BoM boy.

As explained by Sushil and taken up by other economists, including Mr Rajeev Hasnah in "Le Mauricien" of the 2 April 2024, Statistics Mauritius (SM) has been adjusting BoM Balance of Payments statistics since June 22, by moving part of net income of Global Business Companies (GBCs) from the primary income account, which is not included in GDP, to the services account, which is included in GDP.

The BoM, ignoring this adjustment continues in its balance of payments data to place GBCs in the primary income account and not the services account.

As you can see in the table below for the 2023 figures, some 95 bn was recategorised by SM as services . “This excessive adjustment being made to GBC investment income is most likely meant to artificially boost services exports and GDP.”

Rajeev Husnah notes that “ Nous constatons effectivement que la variance entre les chiffres publiés par la Banque de Maurice et Statistics Mauritius augmente de façon conséquente à partir de 2019. Cette variance fait -par coincidence ? -qu’ils sont presque au même montant que des chiffres que nous voyons dans les Investment Income du Primary Account venant du secteur de l'offshore, qui ne sont pas comptabilisés dans le PIB.

Cette variance, qui semble être de l'ordre de Rs 34 milliards en 2019, est passée à presque Rs90 milliards en 2023, pour un effet cumulé de Rs 338 milliards de surestimation probable du PIB depuis 2019 jusqu’à 2023... En tant qu'économiste, j'espère que nous aurons une clarification sur ce sujet, car sinon, nous devrons faire des scénarios diamétralement opposés pour pouvoir faire nos analyses.”

Moreover, in 2023 the public investment figures are overblown. The Public Sector Investment as a % of GDP has averaged around 4.4 over the period 2014-2022. The estimates for 2023 and 2024 are exaggeratedly at 6.2 and 6.6 respectively, compared to 4.1 in 2021 and 3.9 in 2022. And even the ambitious social housing investment is far below expectations.

IMF is forecasting a growth rate of 4.9% for 2024 , but our Pada is already “preparing” us for a growth of 6% !

We won’t be surprised , when we are in a situation where all our GDP components, namely consumption, investment(Public Invt at 6.6 % of GDP in 2024!), and net exports, are being overstated and when we have some Rs 98 bn of difference in the macroeconomic data (net exports of services) being treated by our two main institutions , BoM and SM !