Before the disaster, Sri Lanka’s external debt repayments already consumed about a quarter of government revenues, a level many experts deem unsustainable even after the 2024 debt restructuring.

Sri Lanka has sought a $200 million IMF emergency loan for immediate needs, with rapid financing instrument disbursements typically repayable within three to five years.

The cyclone’s devastation is described as the largest and most challenging natural disaster in Sri Lanka’s history, with more than 600 deaths and hundreds of thousands of homes destroyed.

A group of about 120 leading economists, including Joseph Stiglitz, urges Sri Lanka to suspend external debt repayments and pursue a new debt restructuring in response to Cyclone Ditwah and the economic shock.

Economists warn that additional external lending is likely from sources like the IMF, and that current fiscal space may be insufficient to cover disaster-related needs without more debt relief.

The UK government pledged 1 million pounds in humanitarian aid to Sri Lanka, coordinating with international partners for emergency relief.

Cyclone Ditwah, along with floods and landslides, caused severe damage to infrastructure and livelihoods, further squeezing Sri Lanka’s already limited fiscal space after the 2024 restructuring.

Debt Justice cites that private creditors profited more from Sri Lanka post-restructuring than the U.S. government would under similar terms, highlighting perceived inequities in the debt system.

A group of eminent economists, including Jayati Ghosh, Thomas Piketty, Martín Guzmán, and Kate Raworth, argues for immediate suspension of external sovereign payments and a restructured debt plan aligned with post-disaster needs.

World Weather Attribution links the severity of floods to global warming, signaling climate change may be amplifying this cyclone and related flooding across Sri Lanka and neighboring regions.