Sri Lanka statistics office under pressure to show higher economic growth numbers
ECONOMYNEXT – Sri Lanka’s central bank will start discussions with the Department of Census and Statistics after it reported a 1.6 percent contraction in the economy for the first quarter which was not expected by the Central Bank, officials said.
“I do not think there is a need to open a debate here,” Governor Lakshman told reporters on Thursday.
“What is officially recognized is the Census and Statistics Department’s number. Internally we have discussed and debated. But they have produced their number.
“WE have to accept that as the official number. We leave it to you to debate it.”
He was responding a query from a reporter, whether there could have been an economic contraction of 1.6 percent when the economy was closed only for 10 days.
Central Bank officials say the contraction was unexpected.
“To prevent problems like this in the future, through mutual discussion, our two institutions – others also if there are also government agencies involved in this – are working to build an official process to arrive at an agreed way to do these calculations.”
Sri Lanka closed the airport on March 19, after nominations for general elections closed on March 18, and rapidly imposed work from home and then strict curfews.
However the economic activities had been slowing for several weeks earlier as concern spread in the country with the discovery of Coronavirus patients, mostly from abroad.
Data show that vehicle registration in March fell to 13,219 from 31,402, which is a 42 percent from February.
Revenues at Ceylon Grain elevators which is perhaps the largest integrated poultry firm which is involved in feed to processed chicken fell 18 percent.
Sri Lanka’s central bank used to make GDP estimates at one time.
But it is generally not considered a good practice for central banks to compile GDP data since monetary authorities in many countries have taken on the role of boosting growth rather than maintaining monetary stability, analysts say.
Statistics offices are also not expected to release GDP beforehand to anyone other than the public to stop data from being ‘massaged’.
When growth slowed under the last administration then central bank Governor Indrajith Coomaraswamy also raised questions about the methods, when growth fell in the wake of monetary instability.
Deputy Governor Nandalal Weerasinghe said changes in work practices such as working from may have also changed economic activities and there may be internationally accepted ways of measuring them. (Colombo/Aug21/2020)