IMF says Sri Lanka’s economic outlook to weaken after cyclone

• Exploring additional support

The International Monetary Fund (IMF) said it expects Sri Lanka’s economic activity to take a hit following the widespread destruction caused by Cyclone Ditwah, noting that the scale of damage will become clearer once authorities complete a rapid post-disaster assessment.
IMF’s Director of the Communications Department Julie Kozack said, the Fund is “closely engaging” with the government, development partners and other counterparts as the country grapples with the humanitarian, social and economic fallout. 
“Large parts of Sri Lanka have been affected by the floods, and on that basis, we do expect economic activity to be adversely affected, in addition to the significant human toll,” she said at a briefing this week. 
The IMF is continuing its engagement under the existing Extended Fund Facility (EFF), with staff and Sri Lankan authorities having reached a staff-level agreement on the Fifth Review in October, prior to the cyclone. A Board meeting on the review is expected on December 15.
Kozack said IMF staff is examining “options to further support Sri Lanka in the recovery process”, signalling possible adjustments or additional assistance once damage assessments are finalised. 
“We will provide more details as the assessment of economic needs and damages moves forward,” she added, noting that the findings will shape the Fund’s next steps in bolstering the country’s recovery and resilience.