July 09, Colombo: Sri Lanka has revised the key indicators of economy, Gross Domestic Product (GDP) and economic growth in the past four years after changing the base year and the new calculations have lowered the economic growth during the last two years significantly from previously reported figures.
The Department of Census and Statistics (DCS), in keeping with the international practice, has changed the base year from 2002 to a more recent 2010 from 2002 and included additional data after identifying several new data sources in the calculations, a statement released Thursday by DCS said.
The GDP values for the period from 2010 to 2014 compiled using 2002 and 2010 as base years have been compared and according to the calculations, Sri Lanka's economy has grown in a slower pace than reported earlier for the last two years.
GDP has been calculated annually as well as quarterly by subtracting intermediate consumption from output, which is the value added plus taxes and less subsidies. Until now, economic growth rate has been calculated using the year 2002 as the base year.
DCS explained that usually base year should be revised once in five years with the view of reflecting the changes in the economy. Accordingly DCS has decided to move the base year from 2002 to 2010.
When revising the base year on calculating National Accounts, in addition to moving old base year to a more recent new year other improvements are also made, the DCS said.
In compiling National Accounts , the DCS has adopted the United Nations introduced System of National Accounts (SNA) and has used a locally adopted version of International Standard Industrial Classification (ISIC) to facilitate for international comparisons.
The Department has also applied several new data sources that were identified for economic activities in the calculation procedures.
Under the new base year; 2010, the DCS will publish national accounts from the first quarter of 2010 onward annually and quarterly.
For the year 2013, the economic growth calculated using base year 2002 was 7.2%. Using base year 2010 the growth rate has dropped significantly to 3.4 percent.
Similarly, for 2014, the 7.4% economic growth rate calculated using base year as 2002 reduced to 4.5% using 2010 as base year.
The DCS said this release is preliminary and a refinement is being undertaken, including a more extensive use of the Supply and Use Table (SUT) framework. DCS plans to release full set of national accounts including GDP by production, income and expenditure approaches and economic accounts shortly.
The Census and Statistics Department said the Rebasing will give more accurate data on the economy to enable policy makers to get informed and make correct decisions and policy choices to tackle social and economic problems in the country.