Sri Lanka hid vital information, ran into brick wall: legislator

Apr 04, 2012 (LBO) – Sri Lanka has suppressed information, ignored warnings from independent analysts, manipulated data and markets until the economy ran into ‘brick wall’ a legislator who is an economist has said. An annual report about the Employees Provident Fund, a retirement fund of non-state workers, whose state management has become increasingly controversial, has not yet been released, he said.

He said some of the corrective measures taken including raising interest rates were necessary, but if early action was taken, much of the pain could have been avoided.

De Silva had earlier warned against manipulation of data, especially the inflation index which mislead economic managers to believe that inflation is low when in fact it is much higher than shown in the index.

Sri Lanka’s inflation index does not conform to the COICOPP standard and is missing a key segment.

Rate Manipulation

The United States also got into trouble with the ‘Great Recession’ after the Federal Reserve printed money claiming that inflation shown by a manipulated ‘core inflation index’ which ignored oil and food was the real inflation.

In a so-called market economy, the interest rate is the most import