Courtesy LBO

July 14, 2015 (LBO) – Sri Lanka’s GDP growth rate in the past two years have been disturbed by a sinister action of politicians, former Governor of the Central Bank charged.

Former Governor of the Central Bank Ajith Nivard Cabraal speaking at a special press briefing told reporters Tuesday that the new growth rate of 9.1 percent for 2012 is not a reasonable number.

2012 was a year where the economy was deliberately controlled to some extent; with the credit squeeze that we had as well as the rupee being allowed to depreciate further; So there were certain controls,” Cabraal said.

So that year the growth could have not gone up from 6.3 percent to 9.1 percent. It’s not reasonable. So the growth actually would have taken place in the latter years,”

The growth rate in 2013 and 2014 has now been disturbed. That is where I see some political action.”

The statistics department recently released new GDP figures after rebasing its estimates from 2002 to 2010.

The growth rate for last year has been reduced from 7.4 percent to 4.5 percent and the growth in 2013 has been reduced from 7.2 percent to 3.4 percent.

In 2013 and 2014 there is an economic activity that has not been captured. The totality of our GDP was understated by about 600 billion. Now it was captured and it’s fine,”

But when allocating this growth, I think it has all gone into 2012 instead of being taken some part into 2013 and 2014. I see a little bit of sinister action there,” Cabraal further said.

Former Deputy Minister of Policy Planning Harsha de Silva holding a press conference earlier stated that the significant reduction in growth rate numbers was the reason behind the delay of changing the base year in due time.

Usually the base year should be revised once in five years with the view of reflecting the changes in the economy.

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