Thursday, July 17, 2008

Mahinda's biggest lie?

For the past few years, despite high inflation, despite the war, there's one statistic that the government had been harping about -- Sri Lanka's GDP growth has managed to hover at around 7%.

Writing for her regular column in the DM Financial Times, Anila Dias Bandaranaike, the former Asst. Governor for the central bank thinks that figure is fake. Here's a few choice excerpts :
Currently, the Department of Census and Statistics (DCS), the national statistical agency, is solely responsible for compiling and publishing these statistics. In the past, both the Central Bank and the Chamber of Commerce released their own estimates, and DCS was in the happy position of being able to cross check its own information with that of others, thereby leading to stronger and more robust estimates. Unfortunately, since the other two organisations no longer compile these data, this verification process is no longer possible. [..]

DCS, which was an independent institution directly under the President some years ago, currently falls under the Ministry of Finance. I understand that the present ST holds meetings with DCS officials to discuss preliminary GDP estimates, at which senior Treasury officials provide feedback before the estimates are finalised and released to the public. [..]

First, let’s compare agriculture production with prices. The food sub-index of the CCPI(N) rose by over 30%, rice prices rose by unprecedented levels and the Central Bank’s monthly monetary policy reviews specifically referred to the adverse impact of “domestic supply constraints” on inflation in 2008-Q1. Yet, GDP statistics recorded that production of - paddy, other field crops, vegetables, fruits and livestock - rose by between 2% and 8%. [..]

Second, although inflation rose so sharply and FMCG companies reported declining volumes in most categories, domestic trade recorded 5.5% growth in 2008-Q1. Throughout 2007 too, while agricultural and manufacturing sectors producing domestically traded goods had grown at lower rates and paddy output had declined, it was inconsistent that domestic trade had grown by a much higher rate than the goods to be traded! [..]

Fourth, road transportation reported 8% growth, although registration of new vehicles had declined by 17%, indicating lower growth in private transportation. With rising fuel costs, tightening security and road closures, what drove such high growth? [..]

The whole thing here. (unfortunately, the DM site changes the location of pages rather frequently, so if this link is broken, it's their fault.)

Interesting. Looks like somebody's being creative with their statistics.

10 comments:

Java Jones said...

"Interesting. Looks like somebody's being creative with their statistics."

No prizes for guessing who! That asshole Cabral must be the world's biggest liar. And maybe the others in power are so fucking stupid, they actually believe him. What a fucking circus!!!

Jack Point said...

The problem is thought to lie with the GDP deflator.

Nominal GDP is boosted by inflation; errors in the GDP deflator means that real growth will be over or under stated, most probably over stated.

White said...

I understand why you stopped with excerpts. Original column while interesting fails to carry forward any of the examples to the relevant conclusions, depending heavily innuendo instead.
I can see why you think this is true, your world, Sri Lankan NGO world, is in decline, while rest of the country is growing. Don't depend on Mahinda to tell you the growth rate, look around. A pair of eyes without tinted glasses will blow away any innuendo.
Aren't you the blogger who got fooled by Jathika Chinthanaya Blog into thinking it real? Are you sure you are not getting fooled again? Better get back to writing about chicks, Mr.Lightweight!

Polkichcha said...

White,

I am in business and can testify that there has been a steady decline over the last one and a half years. Things got worse since January this year and look set to get still worse in the second half.

Look at the expansion plans of all the major listed companies - very few (mainly the telecoms) have any investment plans in Sri Lanka.

Profits have been under pressure and cost cutting is the norm these days.

White said...

@Polkichcha
A good look at economy will lead to opposite conclusion from yours. Look at the profits of companies in CSE - UP. Exports - UP. Imports - UP. Higher profits would be there in other businesses if we can examine their books. Can you name the companies that have announced closures or other cut backs. Look at the ads in media. As examples Why is there so many cement ads? Why so any recruitment ads? Ask yourself. JVP strike was unsuccessful. All those and more support the growth figures. In contrast, you have "innuendo" nothing solid, like Ms. Bandaranaike.
Your own business - Examine why your business declined. You will find that was because of your own fault, hard as that to swallow. Accepting Personnel Responsibility is a main characteristic of all successful entrepreneurs.

Polkichcha said...

White:

Vacancies are due to migration to mid east and elsewhere plus government recruitment. Only a small number is due to growth/investment.

Last years profits on CSE companies are up, but a closer look will reveal the weaknesses within. JHK profits are up only on SAGT virtually every other sector is down.

Hemas had a good year thanks to FMCG but look closer and you will see margin erosion and cost escalation - and a read through the Chairman's report will tell you just how optimistic they are.

By the way, where are Hemas expansion plans: in India (except for the hospital project) , where are Carsons expansion plans: India, Indonesia. Aitken Spence - Maldives, India & elsewhere. If things are so rosy why are they putting their bets outside?

Why are land prices down? Why is it so hard to sell a vehicle?

Paint sales are don 10%, cement sales about 30%.

Asanka said...

White, economy is great for people who have their tongue so far up mahinda's arse, they can't see anything else.

Deane said...

bugger, I removed my sunglasses. The economy looks great. back to chiks..

Jack Point said...

Looks like the most recent crop of results on the CSE are beginning to reflect the downturn.

Jack Point said...

White: have a look at the accounts being released on the CSE for September 2008 quarter, almost without exception they were down, and down quite significantly.

People may try to blame the global crisis for this but that broke out only in Sept/Oct 2008; the CSE results reflect the period June-September 2008 and are a result of the Chinthanaya policies.

The impact of global crisis will start flowing from the Dec 08 quarter onwards.