Sri Lanka‘s GDP data projection creates jugglery

Sri Lanka‘s GDP data projection creates jugglery

1 August 2020 02:37 pm

Sri Lanka’s national statistics department is still delaying the issuance of the latest data on GDP and other indicators maybe due to Covid-19 repercussions even for the first quarter of 2020 making it impossible for the Central Bank to update its macroeconomic projections, economic experts alleged.

Therefore Sri Lanka‘s monetary authority is still to come to a conclusion on the country’s economic growth projection and update other macroeconomic data and grappling to present the current economic situation before international financial institutions, they said.

The indifferences of opinion and tug of war between certain government high officials have made the situation bad to worse bringing politics into somewhat independent monetary and treasury authorities, they pointed out.                

The CBSL says that it has not released to the public any update to its macroeconomic projections since the publication of its Annual Report in April 2020.

Given the conditions of uncertainty created by the COVID-19 pandemic, frequent updates to macroeconomic projections are required, and the CBSL has continued to monitor standard indicators of economic activity as they become available.

 It has been using unconventional indicators as well on a real time basis in its analysis and policy guidance, CBSL in media release said adding   that the Department of Census and Statistics is still   to publish the estimates of GDP for the first quarter of 2020.

Once these estimates become available, the CBSL will publish its revised macroeconomic projections.

But several economists and the opposition members expressed concern as to whether the Department of Census and Statistics is resorting to repeat its tainted attempt in 2013 to massage GDP numbers to mislead the public during Rajapaksa regime.

It has been alleged that the top-most official in the country’s official Statistics Bureau during that time, has instructed the officer handling the GDP numbers to increase the growth rate in Quarter I of 2013 from 5.5% to 6% when there were no ground conditions warranting the issue of such instructions.

In the wake of the denial of certain media reports by the CBSL claiming that a sizable contraction in GDP and a large expansion in the fiscal deficit for 2020 are totally false,  former Minister of Economic Reforms and Public Distribution and  eminent economist Dr. Harsha  De Silva said he suspected whether the Government had influenced the Department to delay the data as result of poor growth in the first quarter, which could have an impact on the forthcoming Parliamentary Elections.

However, delaying the data would make Sri Lanka lose credibility among investors, noted Dr. de Silva stating that Corona Lockdown cannot be considered as an excuse for the delay, as only eight days of the first quarter were affected by the lockdown.

The Asian Development Bank (ADB) predicts an economic contraction of negative minus 6.5 per cent for Sri Lanka, whereas the Central Bank predicts an economic contraction of 1.5 per cent,” stated Dr. de Silva, raising the question which of the institutions had computed the right figure 

“Government revenue stands at Rs 408 billion for the first four months of 2020, which is a 60 per cent low compared to the same period last year. Government debt has increased by Rs 994 billion, whereas it only increased by Rs 5,600 billion for the entire five-year period of the previous regime,” he said.

“The first quarter results should be released by mid-June. However, the Director General of the Department of Census and Statistics announced it would be reported on 24 June, and later postponed to 8 July, but data has still not been released.

An attempt made by us to contact the DG of DCS over the phone was futile and the department web site also inaccessible.

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