Business

Following criticism, Stats office wants national policy for better economic data

– Refutes CBSL Governor’s statement on GDP growth rate

– Wants the support of many other institutions

By Madhusha Thavapalakumar

Following doubts expressed about the accuracy of the current economic data, the Department of Census and Statistics (DCS) called for a national policy to be formulated to ensure the most accurate and comprehensive economic data.

Speaking to The Sunday Morning Business, DCS Director General I.R. Bandara emphasised on the importance of other institutions supporting the DCS with accurate data.

“We need a national policy to make sure we receive precise data from other institutions and authorities to enable us to enhance the accuracy of national economic indicators.”

The Governor of the Central Bank of Sri Lanka (CBSL) Dr. Indrajith Coomaraswamy, at a press conference earlier last week, cast doubts about the GDP growth rate of Sri Lanka, saying that he believes it should be higher.

“I don’t think this is a 3% growth economy. My view is that the growth is somewhere between 3.5-4% in 2018. DCS adopted a new methodology three years ago, which needs a lot of surveys to support it. We don’t have resources to undertake lots of surveys,” the Governor said.

To support his statement, Dr. Coomaraswamy pointed out that the International Monetary Fund (IMF) forecasted Sri Lanka’s GDP growth to be 3.5% in 2018 while the World Bank forecasted a GDP growth of 4%.
He added that the proxies used by the DCS under the new methodology to conduct surveys may not be accurate, particularly in the construction and transport sectors.

“Proxies used in the transport sector might not be complete. The Port City has challenges in terms of recording numbers,” he said.

However, Bandara refuted the allegations as she stood by the current economic data compiled by the DCS.

“I would not say our statistics are wrong. We captured the data and arrived at the GDP rate using our current methodologies. There are no problems in the system.”

In October, 2018, the then State Minister of National Policies and Economic Affairs and current Non-Cabinet Minister of Public Distribution and Economic Reforms Dr. Harsha De Silva cast doubts over the economic indicators as well.

“I have a big issue with the growth numbers coming out. There are a lot of activities happening. Are we recording them? The numbers are not reflecting what actually happens in the sector. I will give you an example; the Port City is not in the construction samples.”

Bandara, responding to this issue, stated that the mining area of the Port City was captured in their surveys and, following the commencement of construction, the Port City will be captured in their construction sector surveys.

“The mining area of the Port City was taken into account. Once business activities start, we will take them into account again. When looking at other aspects, such as ones that will provide value to the land, they will be added to the economy data once construction commences,” she said.

In highlighting the need for the support of other institutions, Bandara specifically pointed to the registration of businesses. She said that businesses either do not register or keep registering every year under new names in order to obtain concessions given only in the first year of business.

“Each year, lots of new businesses register under new names, with the same person doing the same business. If a person registers once and conducts business properly, at least one institution will have their data. However, people are not registering like that.”

According to Bandara, this particular issue has a severe impact on the informal sector data of the country, and as such, emphasised on the importance of introducing new methodologies.

She noted: “From the informal sector we manage to get the numbers through surveys. But the problem is that most of them don’t register. We should have a proper methodology.”

She added that the DCS held discussions with the Ministry of Industry and Commerce to create a database as a measure towards addressing these issues.

“Even the Ministry of Industry has the need to create a database like that. They have industry officers in each district. We need others’ support to obtain statistics,” she said.

She added that even online services such as Uber and PickMe are captured in the DCS’s economic data.