Sri Lanka has announced plans to spend an additional $1.6 billion in 2026 to support recovery efforts after Cyclone Ditwah, one of the deadliest natural disasters in the country’s history. The cyclone killed more than 640 people and severely disrupted daily life across large parts of the island.
Moreover, floods and landslides triggered by the cyclone affected nearly 2.3 million people, accounting for over 10 percent of the population, while causing widespread destruction to homes, roads, and essential infrastructure. As damage mounted, the government described the disaster as an unprecedented national challenge.
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In response, President Anura Kumara Dissanayake convened parliament during a month-long recess to seek approval for an extra 500 billion rupees in recovery funding. He explained that the money would support rebuilding homes, transport networks, and railways, while also providing cash assistance to affected families.
However, the president made it clear that the government would not increase its borrowing limit to finance the additional spending. Instead, authorities plan to rely heavily on foreign grants and international assistance to manage reconstruction without further straining public finances.
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Meanwhile, Sri Lanka has already approached global lenders and secured initial support, including $200 million from an IMF rapid relief facility and $120 million redirected from an existing World Bank project. Additionally, the Asian Development Bank approved a $200 million loan to improve water management in flood-hit regions.
Although the economy has stabilized following a $2.9 billion IMF bailout in 2023, officials estimate total rebuilding costs could reach $7 billion. Consequently, the government plans to host an international donor conference next month to mobilize further financial support.