The Sri Lanka recovery plan is taking shape as Treasury coordinates with banks and insurers to support SMEs and households hit by Cyclone Ditwah. With fiscal discipline intact, authorities aim to restore livelihoods, businesses, and economic connectivity swiftly.
Sri Lanka recovery plan prioritizes SMEs and households after Cyclone Ditwah
Sri Lanka’s Treasury has launched an extensive recovery plan to assist households, small and medium enterprises (SMEs), and industries affected by Cyclone Ditwah. Treasury Secretary Dr. Harshana Suriyapperuma emphasized that while the disaster presents a significant challenge, it will not derail the country’s economic recovery or disrupt the reform agenda outlined in the 2026 Budget.
Speaking at the Sri Lanka Economic and Investment Summit, Dr. Suriyapperuma highlighted that the Government is actively engaging with the banking and insurance sectors to mitigate economic fallout. “We have reached out to the financial system to understand the impact on their clients and how we can work together as a team to take the country forward,” he said. This collaboration is aimed at minimizing income losses and business disruption while ensuring the smooth functioning of the real economy.
The recovery plan leverages pre-provisioned emergency Budget lines, with nearly Rs. 30 billion already allocated to address immediate challenges. Treasury has started releasing funds for housing support, with Rs. 7.5 billion directed to assist households in rebuilding damaged homes. To ensure rapid implementation, spending powers have been delegated to District Secretaries and Ministerial Secretaries, allowing allocations of up to Rs. 50 million and Rs. 150 million, respectively, without bureaucratic delays.
Dr. Suriyapperuma underscored that the Government’s fiscal discipline, combined with targeted delegation, allows for swift, transparent response. “Zero tolerance for corruption and channelling funding properly into the Treasury allowed us to build buffers to face situations of this nature,” he added.
Rapid damage assessments are underway with support from the World Bank, which is assisting in evaluating the extent and cost of structural damages. Restoring connectivity and basic economic functions is a top priority. Telecom operators, in collaboration with private firms, have restored most services, ensuring that households and businesses regain essential connectivity quickly.
The Treasury Secretary emphasized that the success of the recovery effort is tied to the implementation of capital expenditure rather than mere allocation. He noted that this year’s capital spending is projected to outperform previous years in terms of effective utilization, reflecting the Government’s commitment to actionable progress.
Public donations have already contributed significantly to relief efforts, with over Rs. 300 million received in local and foreign currencies within days. Customs authorities have set up a fast-track system for relief goods, allowing consignments marked as DMC to clear without taxes or fees, ensuring immediate delivery to affected areas.
For medium-term reconstruction, the Government has approved the establishment of the Rebuilding Sri Lanka Fund. This initiative will involve the private sector, State officials, and political leadership, providing a structured platform for financing ongoing recovery and future development. Dr. Suriyapperuma emphasized that the fund will complement existing multilateral support, with international agencies already offering assistance to strengthen the nation’s recovery trajectory.
The recovery plan also underscores the centrality of SMEs to long-term growth. The Government has reaffirmed its commitment to supporting small and medium enterprises, recognizing their vital role in restoring economic activity, creating employment, and fostering inclusive growth. Key strategies include export diversification, regional development, manufacturing expansion, and digital transformation, all integrated into the broader economic recovery framework.
Despite the scale of Cyclone Ditwah’s damage, Treasury remains confident that the country’s economic path for 2026 remains intact. “Based on the information we have, we are quite certain this will not create a major deviation,” Dr. Suriyapperuma stated, adding that Sri Lanka’s resilience and coordinated action across the public and private sectors will ensure a swift and sustainable recovery.
The Sri Lanka recovery plan demonstrates a strategic combination of fiscal preparedness, institutional collaboration, and community engagement. By linking immediate relief with medium- and long-term reconstruction, the Government aims to stabilize households, revitalize businesses, and accelerate national economic recovery while preserving fiscal discipline and reform momentum.