Will the response to Ditwah be worse than disaster itself?

Furthermore, elevated prof- its incentivise entrepreneurs to take significant risks—navigat- ing flood-damaged infrastructure— to deliver essen- tial goods. This increased supply and competition would, over time, drive prices back down, fostering a robust recovery.

- By Rizwan Muzzammil

Sri Lanka's progress has repeatedly been hindered by decisions that neglect the "unseen," a tendency evident in nearly all Government policy, but particularly urgent today is the response to Ditwah as well as monetary policy

Sri Lanka’s progress has repeatedly been hindered by decisions that neglect the “unseen,” a tendency evident in nearly all Government policy, but particularly urgent today is the response to Ditwah as well as monetary policy

the private sector to shoulder recovery.

Economic turmoil followed the COVID pandemic, marked by a plummeting rupee and soaring cost of living. With Ditwah a similar outcome can be expected if the same policies that led to that outcome are followed.

Due to the promised public reliefs the Government spending must increase. However, it will have difficulty financing this increase with tax takings. To solve this problem it is likely to rely on the central bank, as it has done in the past. The post-COVID economic turmoil was due to the inflationary actions of the central Bank.

Classical economics holds that inflation is the expansion of money supply; price rises are merely a symptom.

This printed money diluted purchasing power without an explicit levy.