The recently concluded Sri Lanka Economic Association (SLEA) annual sessions saw many users of the published national data highlighting inconsistencies and questioning the methodological soundness of the official data.“I see inconsistencies, a lot of inconsistencies, as a user of national income data. The growth rate is rising so fast, in fact, faster than the levels before. The per capita income has been rising.But, at the same time, I see the export sector has been weakening.Sri Lanka is a small country and we cannot have a higher growth (to my understanding); we cannot have 8 percent or higher growth without a strong export growth,” said University of Colombo (UoC) Professor of Economics Sirimal Abeyrathna.
Sri Lanka’s share of exports as a percentage of gross domestic product (GDP) has halved to 16 percent during the last 12 years from 32 percent in 2002/03.
Professor Abeyrathna also noted that despite being a post-war economy, Sri Lanka had to struggle to attract US $ 1 billion foreign direct investments (FDIs), whereas countries such as Vietnam, which started policy reforms much later than Sri Lanka, attracts as much as US $ 10 billion.
“We are even struggling to get US $ 1 billion; still even it’s not sure.So, how come that we achieve an 8 percent or 10 percent growth, without substantial investment improvement, without substantial FDI flows?When I look at certain macroeconomic indicators divided by GDP, I always see issues - they were not consistent with the previous ones,” Professor Abeyrathna said.
Sri Lank had to revise down its original FDI target of US $ 2.5 billion in 2013 to US $ 2 billion but still fell short of good US $ 600 million as the country was able to attract only US $ 1.4 billion.For the first nine months of 2014, Sri Lanka has achieved 1.4 billion in FDIs. The FDI target for the full year is US $ 2 billion.Meanwhile, UoC Senior Lecturer Dr. Priyanga Dunusinghe said Sri Lanka’s GDP, based on the International Monetary Fund’s (IMF) 2001 assessment of quality of data, suffers from deficiencies in the areas of methodological soundness and accessibility.
“Even compared to India and some of the neighbouring countries and East Asian countries, we are really behind in respect of methodological soundness (because we use SNA 1968) and accessibility where our data accessibility is not that good,” Dr. Dunusinghe said.However, he said Sri Lanka’s national account data in other areas of quality— such as reliability, was not too bad.“If you look at the 2013 IMF report, again the IMF says, ‘the national accounts suffer from insufficient data sources and underdeveloped statistical techniques in 2013.
Then, the country does not have a comprehensive benchmark or a system of regular annual surveys on establishment of data.Then, a statistical business register, which could serve as a main way for conducting sample surveys, is not available.Then, the few surveys that are conducted do not have a good sample base.
The estimates of growth value added are prepared directly relying on outdated, fixed ratios established from the base year of 1996’. So, this is what the IMF has to say,” he explained.However, Central Bank Deputy Governor Dr. Nandalal Weerasinghe in response said that these issues were not unique to Sri Lanka and some of them had already been addressed and therefore, there was an improvement achieved over a period of time.