Central Bank Governor Dr. Nandalal Weerasinghe yesterday dismissed the inflation figures presented by Prof. Steve Hanke on Sri Lanka, noting that the analysis did not have a proper foundation for the calculation.

“The methodology of the calculations has not been revealed to even consider. However, the calculation used by the Central Bank of Sri Lanka is followed by most of the central banks in the world,” he said in response to a query from the journalists yesterday.

Dr. Weerasinghe also pointed out that Sri Lanka has been doing the inflation calculation since the 1950s, and knew the methodology.

“Thus, we do not have to consider his version of inflation,” he quipped.

On 3 July, the US-based Economist Steve Hanke said Sri Lanka was in a ‘death spiral’, adding that the annual inflation in the country has risen to a staggering 122%.

“Sri Lanka is in a death spiral. Today, I measure LKA’s inflation at 122%/yr. things are so bad even IMF refuses to offer Sri Lanka a bailout loan. SPOILER ALERT: Sri Lanka has had 16 IMF programs. None have worked,” he tweeted on Sunday. The tweet has created much stir on social media since then. 

However, the local economics insisted on not taking Hanke’s inflation theory very seriously.

Prof. Hanke is an economist at John Hopkins, a private research university in Baltimore, Maryland in the US. He measures the inflation in countries with currency troubles.

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