Sri Lanka Cyclone output shock likely to be offset by ‘broken window fallacy’ effect

ECONOMYNEXT – A shock to Sri Lanka’s gross domestic product in 2026 from Cyclone Ditwah is likely to be at least partly offset by the effect of reconstruction, as well as a fast-normalizing economic activities, officials said. There are expectations that the loss of output would be limited to the first quarter, IMF Mission Chief Mission Chief Evan Papageorgiou said, though more time and data was needed to get a firm idea. Hopeful of Temporary Shock “This is something that we have to very carefully think and examine, particularly with how the response also plays out,” he said. “Of course,…

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