Ditwah impact on economy limited: Ceylon Chamber Chief

Chairman Krishan Balendra 

– Pic by Shehan Gunasekara

• Tourism, agriculture and consumption rebound to pre-cyclone levels within two months
• Banking sector exposure estimated at about 1% of loan portfolios
• Tourist arrivals tracking above last year despite short-term disruption
• Construction, ICT and tourism seen driving growth in 2026

Sri Lanka’s premier business chamber, The Ceylon Chamber of Commerce Chairman Krishan Balendra said the economic impact of the recent cyclone has been moderate, with most key sectors recovering faster than initially feared.

Speaking at the Asia Securities Investor Conference this week, Balendra said assessments conducted around two weeks after the cyclone showed that total damage to cultivated agricultural land was lower than expected, with about 10% fully damaged and a further 5% partially affected. He said agriculture has since returned almost fully to normal operations, with no sustained shortages or sharp price increases.

“There was an initial spike of about 1% in prices, which was visible in supermarkets, but there is no scarcity of vegetables or fruits,” he said, adding that fears of prolonged food inflation had not materialised.

Balendra said banks had estimated that roughly 1% of their overall loan portfolios were impacted by the cyclone, while exporters had raised concerns about temporary factory shutdowns and order cancellations. However, he said by the end of December 2025, the impact on exports had not proved material.

Tourism infrastructure damage was estimated at about Rs. 500 billion, based on data collected from member companies by industry bodies. Despite this, Balendra said the sector had recovered quickly, with arrivals showing resilience.

He said tourist arrivals in the first 25 days of January were about 10% higher than the same period last year, which itself had been a record year. While arrivals immediately after the cyclone were estimated to be 5-10% lower, he said overall momentum remained strong.

Balendra said consumption indicators also suggested limited economic fallout, with supermarket volumes returning to earlier levels. “Consumption is quite robust, which indicates there cannot be too much of an impact on the economy,” he said.

Looking ahead, The Ceylon Chamber Chief identified tourism, construction, ICT, and consumption as the main growth drivers for 2026. He said construction activity was expected to pick up with post-cyclone reconstruction spending, the resumption of major infrastructure projects, and renewed apartment development, including projects in Port City and suburban areas.

He said ICT and business process services had grown into a material export sector, with estimated earnings of about $ 1.65 billion in 2025, and that growth momentum was expected to continue.

On tourism, Balendra said India would remain Sri Lanka’s largest and most important source market, with significant long-term growth potential. However, he stressed that higher tourist spending would require refurbishment of existing hotel stock and the entry of more international hotel brands.

He also noted improving city hotel occupancy, which rose to 69% in November 2025 and about 62% in December 2025, with January occupancy expected to exceed 70%, creating scope for upward price adjustments.

A World Bank rapid assessment of the economic impact estimates the damage at $ 4.1 billion, or 4% of GDP.