Economic analyst debunks Harsha’s claims

The Central Bank and the World Bank follow a similar procedure to calculate the per capita income, said Senior Economic Analyst Vincent Mervyn Fernando.

He made this observation responding to doubts raised by UNP MP Dr Harsha de Silva over the calculation of per capita income in the Central Bank report 2011.

MP de Silva had stated there had been a miscalculation of per capita income in the report, and to prove his point he even referred to a part of the article written by Central Bank former Deputy Governor W A Wijewardena published in an English newspaper.

Referring to this article, Fernando said former Deputy Governor Wijewardena has only stated that the Central Bank should have made a further clarification on the calculation of per capita income by estimating that the exchange rate was Rs 110.54 for USD 1 in 2011 when the foreign sector was not performing well.

Wijewardena had also stated that according to the Central Bank, the exchange rate was Rs 113 for USD 1 in 2010.

Fernando observed that in his article Wijewardena had pointed out the significance of the Central Bank report and had commended that the Central Bank had performed that task successfully.

Fernando said Dr de Silva had misinterpreted the article. He said there is an accepted mechanism to calculate the per capita income by dividing the GDP by the mid year population.

“Then the value taken from rupees is converted to USD. This is the normal procedure, and it had been accepted even by Wijewardena when he was serving as the Deputy Governor in 2007 – 2008,” he said.

Fernando said the foreign sector was performing well during the first half of 2011. This has helped the average rate to settle at Rs 110 in 2011. He observed that economic specialists should not be hesitant to appreciate the positive while making constructive criticisms.