Census Dept. reporting issue rendering 100 per cent accurate figures on growth not possible'

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By Hiran H.Senewiratne -January 2, 2019, 9:25 pm 

The Census and Statistics Department has a reporting issue when releasing certain statistical and economic data, such as economic growth, due to lack of  resources at the institution. This has resulted in not releasing 100 percent accurate figures,  Central Bank Governor Dr.Indrajit Coomaraswamy said

" It is said that the 2018  economic growth rate has not been finalized yet but I presume it would be less than 3.5 percent to 4 percent. However, due to the Census and Statistics Department resources problem when reporting certain calculations and survey reports at certain times it does not reflect the actual figures, Dr Coomaraswamy said presenting a road map for monetary policy for 2019. at the Central Bank auditorium yesterday.

He said that the  economy faced heightened challenges in 2018, emanating mainly from the global economic, financial and geo-political developments that adversely affected the external sector. "There were also several domestic challenges. Political uncertainties, especially during the last quarter of the year, amplified challenges to overall macroeconomic stability. Sub-par economic growth continued in 2018 following subdued growth in 2017, the Governor said. 'Favourable weather conditions supported a rebound in the agriculture sector while the expansion in services activities has been broad-based. However, industrial activities slowed in 2018 mainly due to the slowdown in the construction sector, he said. 'Consumer price inflation remained low in 2018 in spite of temporary ups and downs due to volatile food prices and administrative price adjustments, the Central Bank Governor added.'In response to the tight monetary policy stance pursued by the Central Bank in the past two years, monetary and credit growth decelerated in 2018 from the higher levels observed in 2016 and 2017. An adequate expansion in domestic credit flows driven by demand from the private sector was witnessed during the year, he explained.

Dr. Coomaraswamy  also said that forensic audit on the controversial bond issue will be completed before end of this year. The  report has been handed over to the Auditor General and he will select relevant audit firms and auditing procedure based on national procurement guidelines.

" There is some delay in the system due to the complexity of the procedure, he added.        

Meanwhile, Sri Lanka will cut the volume of rupee bonds foreigners can hold from 10 percent of total outstanding to 5 percent,  Dr. Coomaraswamy said, as a soft-pegged regime has put renewed pressure on the currency.'Some bond investors are footloose, and making the external sector volatile, he said."In view of the increased volatility in global financial markets we intend to reduce the threshold for foreign investment in rupee denominated from 10 percent to 5 percent, the Governor said. He added:'Sri Lanka runs a soft-peg with the US dollar and has found it difficult to cope with bond outflows as it tries to prevent a 'disorderly adjustment' of the exchange rate and then print money to keep rates down.'Rupee bond holders have been fleeing Sri Lanka from around May after the Central Bank cut rates and injected liquidity in April.'