Assessing Economic Data Integrity Amidst Sovereign Default

The sovereign default of Sri Lanka in April 2022 has sparked concerns about the accuracy and reliability of official economic data, including GDP, inflation, and unemployment figures. The integration of statistical agencies under government ministries in developing countries like Sri Lanka raises concerns about political influence and data integrity. The inflation data in Sri Lanka, measured by indices such as Colombo Consumer Price Index (CCPI) has been historically low until 1977 but has since risen to double-digit levels, reaching 46% in 2022. However, authors raise doubts about the accuracy of these figures due to factors such as subsidised goods distorting consumer price indices and manipulated exchange rates affecting import costs. Unemployment data in Sri Lanka face challenges due to disguised unemployment and weak measurement methods. Discrepancies between official labour force surveys and data from institutions like the Employees' Provident Fund indicate a need for more accurate and comprehensive data collection methods to understand the true extent of unemployment in the country. These discrepancies could affect policy decisions, especially regarding monetary policy and economic growth strategies.