Sri Lanka’s already fragile economic recovery faces a major setback as Cyclone Ditwah wreaks havoc across homes, roads, and vital crops. Officials warn that rebuilding the country could cost up to $7 billion, potentially plunging more families into poverty.
The island nation is still grappling with the worst economic crisis in decades, which peaked in 2022 and doubled the poverty rate to nearly 25% of its 22 million people. While a $2.9 billion IMF bailout had sparked hopes for a rebound, with growth projected at 4.5% this year, analysts now predict the economy could slow to about 3% in 2026 due to the cyclone’s destruction.
Striking in late November, Ditwah has become Sri Lanka’s deadliest natural disaster since the 2004 tsunami, killing 635 people and impacting roughly 10% of the population. The cyclone devastated critical infrastructure and key crops like rice and tea, essential to the country’s economy.
“Cyclone Ditwah struck regions already weakened by years of economic stress,” said Azusa Kubota, United Nations Development Programme (UNDP) Resident Representative in Sri Lanka. “Recovery will be slower and more costly in areas where flooding and vulnerability overlap.”
The Cost of Rebuilding
Sri Lanka’s Commissioner General of Essential Services, Prabath Chandrakeerthi, warned that the rebuilding bill could hit $7 billion and urged multilateral partners and donors to provide support.
The government has requested $200 million in emergency funds from the IMF, which is reviewing the request. An IMF team will visit in January for a fresh assessment before releasing the next tranche of the original program.
UNDP analysis shows that floodwaters from Ditwah have inundated nearly 20% of the country, affecting an estimated 2.3 million people. Kubota stressed that Sri Lanka cannot shoulder more debt for rebuilding and called for affordable international financing to prevent the country from falling off the “debt cliff.”
Analysts also warn that economic reforms, such as restructuring loss-making state firms, may be delayed as Colombo prioritizes cyclone recovery.
Impact on Tea and Rice
The cyclone has severely impacted Sri Lanka’s $5 billion apparel and $1.5 billion tea industries, which employ over a million people. Factories have reported low attendance for two weeks, and tea output is expected to drop by 3–4 million kilograms in December due to floods and soil erosion, according to Roshan Rajadurai of the Planters’ Association.
Paddy farmers have suffered even more. Nearly 575,000 hectares of paddy fields were destroyed just as the main cultivation season began, according to UN estimates. Irrigation canals have been wiped out, leaving fields filled with silt and debris.
“Farmers don’t have funds to replant,” said K.K.G. Thilakabandara, chairman of Sri Lanka’s largest rice farming association. “Authorities must act fast and release funds, or farmers’ livelihoods and finances will be devastated.”
