Cyclone Ditwah estimated to cost economy up to Rs.320bn as national balance sheet takes a hit

Sri Lanka faces a potential economic loss ranging between Rs.210 billion and Rs.320 billion, following the devastation of Cyclone Ditwah, with the experts warning the event represents a major shock to the national balance sheet rather than a localised natural disaster.

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The cyclone has impacted nearly all districts that collectively generate approximately 82 percent to 84 percent of the national gross domestic product (GDP), disrupting critical economic corridors from the Western province to agricultural heartlands.

Economist and Lanka Rating Agency Ltd Chief Executive Officer Dr. Kenneth De Zilwa characterises the disaster as a "national balance-sheet shock", noting that the banking sector assets reflect the liabilities of the real economy.

According to his initial cursory assessment, the total estimated loss accounts for 0.75 percent to 1.0 percent of GDP. The breakdown of these losses projects a Rs.70 billion to Rs.110 billion hit to production, Rs.55 billion to Rs.75 billion in infrastructure damage and Rs.35 billion to Rs.50 billion in agricultural losses. Furthermore, household and small and medium enterprise (SME) assets are estimated to have suffered damages totalling between Rs.50 billion and Rs.85 billion.