ECONOMYNEXT – Sri Lanka’s gross domestic product grew 6.7 percent in the second quarter of 2015 from a year earlier under a revised methodology, officials said.
Agriculture sector grew 5 percent, services grew 7.9 percent and industry grew 2.0 percent under the old base.
A fourth category taxes less subsidies grew 14 percent.
The highest contribution to GDP came from the services sector with a contribution of 61.2 percent, followed by industry with 23.5 percent and agriculture, forestry and fishing with 7.5 percent.
The new national accounting data is based on 2010 base year and the older rate based on a 2002 base year. The price level of 2010 is used.
The GDP deflator is 3.2 percent.
Director General of Statistics A J Satharasinghe said under a new United Nations System of National Accounting (SNA 2008) the size of the GDP has expanded.
"This is the same in any economy, it also happened in India," Satharasinghe said.
Officials said changes were made to GDP estimates from the earlier methond. Now work-in-progress is included; consumption of fixed capital, change in inventories is taken into accout. Self-produced items consumed which are not sold are also included. Financial intermediary services have been excluded. Taxes less subsidies category had been introduced in addition to agriculture, services and industry.
Officials said the old GDP data was ‘correct’ based on the directions given to them and the methodologies used.
Critics say when national accounts are revised internationally the GDP tends to expand and when inflation indices revised price increases are understated. One of the worst manipulations of GDP and inflation involving technique called ‘hedonics’ was devised in the US. Imputed values also tend to bloat GDP critics have said.
However long-term use of manipulated inflation data generates economic bubbles and collapses as central banks targets false price levels.
Satharasinghe said the deflators (a general inflation level used to find ‘real’ economic growth) has also been improved ‘tremendously’.
Ekananayake, from the statistics office said the annual GDP is more correct and quarterly estimates are benchmarked.
Sri Lanka’s GDP is now compiled by using the production approach, within 75 days. In the near future GDP based on the expenditure approach will also be released. However some of the 250 data sources that are used comes with a delay.
As a result quarterly GDP will be revised later when more data is found. Each quarter will be revised in the following two quarters.