Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum
සිංහල පරිවර්තනය
Poll

SLEF Market Sentiment Indicator

73% 73% [ 1145 ]
27% 27% [ 428 ]

Total Votes : 1573

Latest topics
» BALA WILL BE A STAR
by fireshelter Today at 12:25 am

» Who is a HNWI
by Yahapalanaya Yesterday at 9:41 pm

» RENUKA CAPITAL PLC (KZOO.N0000)
by Elahara Yesterday at 6:57 pm

» MULL heating up!
by anjelo Yesterday at 4:53 pm

» Save the stock market- and may be they (cse) will bring down the cse & sec levy.
by reyaz Yesterday at 3:07 pm

» AINV.N is ready to run ?
by Neluka Karannagoda Yesterday at 2:24 pm

» KGAL at LKR 70
by SIRRA123 Yesterday at 12:50 pm

» VALLIBEL FINANCE PLC
by SIRRA123 Yesterday at 12:20 pm

» HEXP Starts Next Run to Rs.300
by J-CAT Yesterday at 11:51 am

» ACME & LCEM ??
by Tissa Yesterday at 11:34 am

» CFVF run Will start soon
by kjojo Yesterday at 10:54 am

» WHERE NDB & DFCC ARE HEADING??
by worthiness Yesterday at 10:50 am

» Fresh cut bank instrument for lease/sale, such as BG,SBLC, MTN, Bank Bonds
by jonbroker Yesterday at 10:24 am

» Penny TESS 7.4Mn trade volume!
by anjelo Yesterday at 9:21 am

» Financial Instrument- Lease BG/SBLC
by leasingmandate Yesterday at 4:36 am

» PABC : This must pass 20 rs. level very soon
by soileconomy Thu Oct 19, 2017 9:31 pm

» Today run LOFC 5+
by kjojo Thu Oct 19, 2017 8:25 pm

» Planning to buy some shares - Suggession please
by sanjulanka Thu Oct 19, 2017 7:33 pm

» Comparison TAFL,BFL & GRAN
by TARGET Thu Oct 19, 2017 7:14 pm

» LLUB - At the Current Price
by kjojo Thu Oct 19, 2017 5:49 pm

» Positive Trends.. Exports up..
by ranferdi Thu Oct 19, 2017 5:03 pm

» LCEM 10/-.......
by kjojo Thu Oct 19, 2017 2:46 pm

» KZOO ... KZOO ...Stock Buy Back underway ?
by Namal Thu Oct 19, 2017 1:32 pm

» LANKA CEMENT....STILL GOOD
by Wimal Modawansa Thu Oct 19, 2017 9:09 am

» The New Pope: Bergoglio of Argentina
by leasingmandate Wed Oct 18, 2017 5:41 pm

» කිංස්බරි හෝටලයේ විදුලි සෝපානය මනාලයා සමග හිරවේ.. මංගල උත්සවය ජංජාලයක් වෙයි.. මනාලයා වන්දි ඉල්ලා නඩු යයි.
by trasantha Wed Oct 18, 2017 8:03 am

» UDPL Next Run soon
by kovida Tue Oct 17, 2017 10:58 pm

» Financial Instrument- Lease BG/SBLC
by leasingmandate Tue Oct 17, 2017 2:39 pm

» HVA.............? wtz gonna happen with HVA?
by anjelo Tue Oct 17, 2017 1:53 pm

» watch CSF
by kjojo Tue Oct 17, 2017 12:21 pm

» ගංගා මෑණියන්ගේ බැල්ම ලගදිම කොටස් වෙලදපොල දෙසට
by ranferdi Tue Oct 17, 2017 7:57 am

» + Point for Market : IMF reaches staff level agreement on third review of Sri Lanka’s EFF
by Ran49 Tue Oct 17, 2017 7:16 am

» Hotels face tough time --- Drop in tourist arrivals predicted/so many new hotels are opening
by kcrRanz Tue Oct 17, 2017 4:55 am

» Asian shares conquer 10-year peak
by kcrRanz Tue Oct 17, 2017 4:51 am

» Ideas about SCAP.N000 ?
by kcrRanz Tue Oct 17, 2017 4:40 am

» Why CSEC going up....???
by kcrRanz Tue Oct 17, 2017 4:30 am

» why bfl...gran...tafl...not moving
by kcrRanz Tue Oct 17, 2017 3:17 am

» Time to Talk About How Budget 2018 will Help for Us!
by Dailytrader Mon Oct 16, 2017 7:02 pm

» MBSL - MERCHANT BANK OF SRI LANKA
by Roshan Fernando Mon Oct 16, 2017 2:11 pm

» LOFC 7+ next week
by kjojo Mon Oct 16, 2017 12:41 pm

» SAMP - ABSORBING REAL VALUE
by niru Mon Oct 16, 2017 11:43 am

» RENUKA CAPITAL PLC (KZOO.N0000)
by Namal Mon Oct 16, 2017 10:54 am

» From today - Watch Watch
by Richman Mon Oct 16, 2017 8:44 am

» IS CTBL.N ready to run ?
by Richman Mon Oct 16, 2017 8:43 am

» Sri Lanka tea prices seen remaining high on global shortfall
by Wimal Modawansa Mon Oct 16, 2017 8:10 am

» Recommended buys in planation
by Wimal Modawansa Mon Oct 16, 2017 8:08 am

» BFN .. ORIENT FINANCE PLC
by worthiness Sun Oct 15, 2017 1:38 pm

» Plantation Sector Summary
by Wimal Modawansa Sun Oct 15, 2017 7:28 am

» BUY CFT with expect to cross share 10+
by sameboy Sat Oct 14, 2017 12:53 pm

» HATTON PLANTATIONS LTD
by gdid Fri Oct 13, 2017 5:32 pm

» WATA N00000
by gdid Fri Oct 13, 2017 5:29 pm

» MAL N and X
by Captain Fri Oct 13, 2017 12:05 pm

» Watch DFCC and NDB and guess which one is best
by Captain Fri Oct 13, 2017 11:54 am

» WHY WE SHOULD BUY CFVF...
by kjojo Fri Oct 13, 2017 11:42 am

» 4 new all-time record prices in Lanka Commodity Brokers Catalogue of 11 Oct. auction
by anjelo Fri Oct 13, 2017 8:58 am

» LIOC run Just started
by Ran49 Fri Oct 13, 2017 7:28 am

» LIOC is going to increase oil price
by SIRRA123 Thu Oct 12, 2017 9:06 pm

» See what these UNP criminals has done to our EPF and ETF, We have to burn these fellas
by Ryan Hudson Thu Oct 12, 2017 7:57 pm

» COCR COCR
by newone Thu Oct 12, 2017 5:41 pm

» Heavy rainng......But still VPEL & HPFL at very low price
by newone Thu Oct 12, 2017 5:35 pm

» TKYO - Capital Trust Recommends BUY
by Maxime Thu Oct 12, 2017 3:17 pm

» CEYLON TEA BROKERS PLC (CTBL.N0000)
by Namal Thu Oct 12, 2017 2:26 pm

» DOCK FUTURE hit 120 share
by kjojo Thu Oct 12, 2017 1:58 pm

» keey eye on DOCK
by kjojo Thu Oct 12, 2017 12:37 pm

» look MULL. Today Run
by TuTanKaman Thu Oct 12, 2017 12:25 pm

» MEL.N0000-ANY NEWS
by DHAVER88 Thu Oct 12, 2017 12:15 pm

» Aitken Spence - Prospects
by MasterD Thu Oct 12, 2017 10:41 am

» NDB Bank PLC
by MasterD Thu Oct 12, 2017 10:38 am

» UBC - Union bank a hidden GEM
by MarketWch Thu Oct 12, 2017 10:36 am

» Correct time to buy DFCC
by Harry82 Thu Oct 12, 2017 9:28 am

» NTB A RISING STAR
by samaritan Thu Oct 12, 2017 9:20 am

» Watch the followings
by Harry82 Thu Oct 12, 2017 9:03 am

» WHERE IS TELLER........market down.......ASI 5700...
by kjojo Thu Oct 12, 2017 9:01 am

» Bank Guarantee/StandBy Letter of Credit(MT760),Project Funding,MT103,Loan.
by kimsungnyon010 Thu Oct 12, 2017 8:17 am

» Bank Guarantee/StandBy Letter of Credit(MT760),Project Funding,MT103,Loan.
by kimsungnyon010 Thu Oct 12, 2017 8:16 am

» Bank Guarantee/StandBy Letter of Credit(MT760),Project Funding,MT103,Loan.
by kimsungnyon010 Thu Oct 12, 2017 8:13 am

» AGST can move
by Richman Thu Oct 12, 2017 7:28 am

» ACAP latest penny
by Richman Thu Oct 12, 2017 7:06 am

» Can the oil price remain as it is?
by predictor Thu Oct 12, 2017 6:52 am

» Market is falling continuously
by Yahapalanaya Thu Oct 12, 2017 5:27 am

» COLOMBO SHIT EXCHANGE UNDER YAHAPALANAYA
by Yahapalanaya Thu Oct 12, 2017 5:20 am

» LDEV Price
by sanjulanka Wed Oct 11, 2017 6:10 pm

» Stock Market Entertainment
by SL.Market Wed Oct 11, 2017 6:05 pm

» DOCK FUTURE
by kjojo Wed Oct 11, 2017 1:02 pm

» LLMP N0000
by kjojo Wed Oct 11, 2017 12:54 pm

» look LOFC- Ready to run
by max shanu Wed Oct 11, 2017 10:03 am

» LOLC towards ...150
by Harry82 Wed Oct 11, 2017 9:37 am

» Is it ok vone
by prasa2004 Wed Oct 11, 2017 8:53 am

» WILL SEYLAN WAKE UP TODAY TO JOIN BANKING RUN??
by prasa2004 Wed Oct 11, 2017 8:51 am

» How about LDEV
by sanjulanka Tue Oct 10, 2017 11:29 pm

» FC recommends a STRONG BUY on SAMP.N
by Harry82 Tue Oct 10, 2017 4:08 pm

» Watch LDEV..
by Beta1 Tue Oct 10, 2017 2:09 pm

» How About CHOU
by max shanu Tue Oct 10, 2017 11:30 am

» ACME and LCEM
by Tissa Tue Oct 10, 2017 10:31 am

» UDPL Lead the Plantation
by Ran49 Tue Oct 10, 2017 7:43 am

» Financial Instrument- Lease BG/SBLC
by leasingmandate Tue Oct 10, 2017 4:32 am

» ready to ACME blast
by gayanath1983 Mon Oct 09, 2017 3:06 pm

» ACME 9+ Coming soon
by rasikagamage Mon Oct 09, 2017 2:31 pm

» World bank confirms bribery involving Maithri –Australian Co. that gave it blacklisted
by samaritan Mon Oct 09, 2017 2:14 pm

Insights into Sri Lanka’s re-based GDP estimates

View previous topic View next topic Go down

Insights into Sri Lanka’s re-based GDP estimates

Post by Melissa Pereira on Wed Sep 23, 2015 9:21 am

Sri Lanka’s re-based GDP estimates suggest that the economy has grown by 5.5 per cent in the first half of 2015. The figures rely on the re-basing of the country’s national accounts compilation undertaken by the Department of Census and Statistics (DCS). The most current approximations were based on 2002 production and consumption patterns. Over time, this one-year snapshot of the economy becomes less accurate and can lead to overestimation of traditionally dominant sectors such as agriculture and underestimation of newer sectors, especially those in the industry and services sectors.
The IMF statistical division recommends a change of base year every fifth year. Sri Lanka has not done so since 2002 suggesting that the previous GDP framework underestimated economic activity. The re-basing uses 2010 as the new base year, and includes expanded coverage of economic activities through information collected by various censuses. This, together with other changes such as a shift towards the 2008 System of National Accounts,re-classification of economic activities as per the International Standard of Industry Classification (ISIC), etc., will also mean changes in the sectoral composition of GDP. In total, the old and new national accounts will not be comparable.
While data challenges remain in any attempt to compile national accounts, additional complexities exist to accurately estimate the size of Sri Lanka’s significant informal economy. Notwithstanding such weaknesses, a regular re-basing exercise is extremely useful to provide a clearer picture of an economy’s size and structure and allow a better planning of longer term growth and development options.
The DCS’ statistical exercise has produced revised nominal and real GDP estimates for Sri Lanka for the period 2010-14. At the aggregate level, the re-basing exercise suggests that share of agriculture in GDPis smaller and that of industry is larger than previously estimated, and that the Sri Lankan economy continues to be a services sector dominated one. This is not surprising in view of expanded activities involving sectors such as telecom, information technology, etc., that is better captured with fresh sources of data.
The re-basing also shows that the absolute size of the Sri Lankan economy in 2010 was larger by over 14 per cent at nominal prices than previously estimated, but that this difference has shrunk gradually to 5.6 per cent by 2014 (Figure 1). If differences are significant, GDP re-basing can lead to changes in key indicators, albeit as cosmetic alterations; for example, Sri Lanka’s per capita GDP has risen to US$ 3,795 in 2014 from the previously estimated US$ 3,625 as a result of the re-basing. At the same time, the increase has not been sufficiently large to significantly impact the country’s fiscal deficit-to-GDP or public debt-to-GDP ratios, and as such, holds limited broader economic consequences.
Rebasing, however, matters if GDP growth rates are an important consideration for governments. Slower real growth after a re-basing exercise is a fairly common and accepted occurrence, as witnessed in many of the African countries that have done similar exercises. This is because with economic growth, changes in relative prices are to be expected; in effect, re-basing of real GDP means adopting a new set of reference prices to value output in each year.If there has been fairly strong economic growth and relative prices have changed, then almost certainly the first year will have a higher measured real GDP when national accounts are re-based. With a higher initial level of GDP, the growth rate can turn out to be smaller in subsequent years.
What is puzzling in Sri Lanka’s re-based real GDP growth is that even as output moves to a higher base in 2010, significantly high growth rates are recorded in the immediate years thereafter (Figure 1). In 2011-12, GDP growth appears to have averaged 8.8 per cent per annum, well ` excess of the 7.3 per cent growth under the old GDP base (Table 1). GDP growth sees a sharp fall during 2013-14, shrinking to a rate of 4 per cent per annum. Thus, Sri Lanka’s real GDP growth after re-basing – measured by reference to the prices and structure of the economy in 2010 – appears to have grown at varying rates, recording high growth initially and tapering off sharply in subsequent years.The sharp volatility in growth of the re-based GDP series is even more evident from quarterly estimates (Figure 2).
The DCS has devised a GDP implicit price deflator with a revised base year of 2010 – with weights assigned to capture price changes and derive constant value added. The new GDP deflator shows significant volatility against not only the old GDP deflator, but also against the Colombo Consumers’ Price Index (CCPI) - (Table 1). The data and methodology employed in re-basing Sri Lanka’s constant price GDP estimates thus need further study and clarification to understand underlying price movements. For now, on the assumption that the broad trends of a higher revised economic base is correct, the preliminary data does suggest that Sri Lanka is most likely to experience a slower rate of economic growth than seen in the recent past.
Courtesy: The Island 22 September 2015

Melissa Pereira
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

Posts : 680
Equity Stars : 2942
Reputation : 1
Join date : 2015-05-11

Back to top Go down

View previous topic View next topic Back to top

- Similar topics

 
Permissions in this forum:
You cannot reply to topics in this forum
Top posting users this week
kjojo
 
TARGET
 
kcrRanz
 
anjelo
 
Namal
 
sureshot
 
Wimal Modawansa
 
SIRRA123
 
anges
 
Ran49
 

Statistics
We have 21134 registered users
The newest registered user is CHANAKA PRASAD

Our users have posted a total of 328757 messages in 50520 subjects
Who is online?
In total there are 47 users online :: 0 Registered, 0 Hidden and 47 Guests

None

Most users ever online was 541 on Mon Sep 19, 2011 11:29 am
Forum Disclaimer

The information contained in this forum have been submitted by third parties directly without any verification by us. The information available in this forum is not researched or purported to be complete description of the subject matter referred to herein. We do not under any circumstances whatsoever guarantee the accuracy and completeness information contained herein.

www.srilankaequity.com its blogs, forums, subdomains and/or its affiliates and/or its web masters, administrators or moderators shall not in any way be responsible or liable for loss or damage which any person or party may sustain or incur by relying on the contents of this report and acting directly or indirectly in any manner whatsoever.

Trading or investing in stocks & commodities is a high risk activity. Any action you choose to take in the markets is totally your own responsibility, www.srilankaequity.com its blogs, forums, subdomains and/or its affiliates and/or its web masters, administrators or moderators shall not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information. The information on this website is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. The writers may or may not be trading in the securities mentioned.