September 29, 2006 (LBO) – Two key agencies that prepare Sri Lanka’s national accounts, are working towards compiling a single set of numbers, to ensure credibility in growth figures, officials said Friday.

The Census & Statistics Dept and the Central Bank now issue two sets of growth numbers for Sri Lanka, and they differ by a few decimal points which causes confusion and has somewhat dented public credibility.

For instance, the Central Bank on Friday said the economy has expanded by 8.0 percent for the six months of this year, a day after the Census & Statistics Dept announced it was 7.1 percent.

"There is nothing wrong with both sets of numbers, the data structure is different," the bank’s Head of Economic Research H N Thenuwara told reporters.

Both agencies are expecting a robust economic expansion with the Central Bank forecasting a full-year growth of 7.0 percent in 2006.

"The problem lies in the base year of both institutions," explains Anila Dias Bandaranaike, Director Statistics at the Central Bank.

"The Census uses 1998 as the base year, while the bank uses 1996. We need to revise the base year to a common platform. The structures are being done," she said adding that both institutions don’t like to confuse the public.

"We in fact like the debate among various sections of the public when both institutions come out with slightly different numbers," she said.

Politicians and bureaucrats, who frequently quote the agency that puts out the higher figure, can still have some time put a spin on a few yarns on the country’s economy.

However, Bandaranaike says people should not be carried away with high growth numbers, as the picture could change if the security situation deteriorates further.

Over 60,000 people have been killed in the island’s Tamil separatist conflict since 1972, while an upsurge in violence since December has killed 1,500 people by official count.

"We are concerned about high inflation now, the country cannot be complacent," she said referring to the country’s consumer prices which rose to 15.4 percent in Sept from 15.3 percent in August.

"If the security situation does not get better, it disrupts vital areas like transport, food distribution, that also has an impact on inflation."

Central Bank governor Nivard Cabraal said recently that the country was heading for an 8.0 percent growth next year, the best in 28 years, when the economy expanded by 8.2 percent.

Bandaranaike said the growth was also producing jobs with the latest surveys showing that unemployment was down to 6.3 percent.

Critics say Sri Lanka’s central bank is unable to contain inflation because it is forced to print money by keeping policy rates artificially low due to fiscal dominance of its monetary policy.