IMF Examining Additional Support for Sri Lanka After Cyclone Ditwah

Colombo: The IMF is exploring ways to support Sri Lanka in its recovery process following Cyclone Ditwah, which has caused widespread destruction in the island nation and left over 450 dead.

The International Monetary Fund spokesperson Julie Kozack said at a press briefing on Thursday that the organisation continues to support Sri Lanka’s recovery, reform and resilience efforts under the Extended Fund Facility (EFF). She noted that IMF staff and Sri Lankan authorities had reached a Staff-Level Agreement on the Fifth Review in October, before the cyclone struck, and that the team is now assessing options to provide further support for the recovery process.

Sri Lanka is struggling with severe flooding, landslides and large-scale damage to essential infrastructure following the cyclone. Several districts remain cut off, placing heavy pressure on the country’s disaster-response systems.

Julie Kozack said the IMF Board will hold a meeting on December 15 to consider available options for additional assistance. She added that more details will be shared as assessments of the economic impact and damage progress, which will guide the IMF’s decisions on the forms of support that can be extended.

Sri Lanka is expecting to receive the sixth tranche of its nearly USD 300 crore IMF bailout. Authorities in Colombo are hopeful that the release will come soon.

The government is currently estimating the overall cost of destruction caused by Cyclone Ditwah. Initial assessments suggest losses of USD 600–700 crore, which would amount to around 3–5 per cent of the country’s GDP.

The 48-month extended fund facility deal with the IMF in March 2023 carried hard reforms to Sri Lanka's welfare-based governance. It was signed after Sri Lanka plunged into an unprecedented economic meltdown with its first-ever sovereign default. Since the cyclone, calls for concessions from the IMF have come to the fore from both the government and the opposition.