CBSL: Cyclone Ditwah to Have Minimal Impact on 2026 Growth 📈

The Governor of the Central Bank of Sri Lanka (CBSL), Dr. Nandalal Weerasinghe, has confirmed that despite the devastation caused by Cyclone Ditwah, the country’s economic trajectory for 2026 remains resilient. • Growth Outlook: The CBSL maintains a GDP growth projection of 4% to 5% for 2026. While the cyclone caused an initial shock, December data suggests the economy has overcome the setback without requiring major target modifications. • Inflation & Prices: Inflation is expected to hover around the 5% target in the coming months. Although the prices of goods spiked immediately after the disaster, they have since normalized as supply chains were restored. • Sector Resilience: Agriculture & Infrastructure: While these sectors faced initial devastation, recovery efforts are underway. Construction: Rebuilding activities are expected to provide a "disaster boom," with the Construction PMI already jumping to 66 in December. External Sector: The IMF has conducted assessments and confirmed that the existing Extended Fund Facility (EFF) remains unchanged, with formal reviews set to continue in March. • Fiscal Position: The government has allocated a Rs. 500 Bn supplementary budget for recovery, supported by a treasury surplus. This is expected to stimulate economic activity through reconstruction without derailing fiscal discipline. _Note: Projections are based on provisional December data and ongoing IMF assessments._