One in five Sri Lankan households can't afford food basket, UN finds

A United Nations assessment has found that Sri Lanka is experiencing growing socio-economic pressures due to the ongoing Middle East crisis, with effects being felt across fuel prices, inflation, trade, food security and public finances.

Issued yesterday (09), the "Sri Lanka Middle East Crisis Socio Economic Impact" report highlighted that energy costs remain a critical concern, noting that Petrol 92 rose to Rs. 414 per litre and auto diesel to Rs. 382 per litre in June 2026, compared to December 2025 levels.

According to the report, fuel import costs increased by 62.5% year on year to USD 2.7 billion during January to May 2026, while inflationary pressures also rose, with headline inflation reaching 6.8% in June 2026.

Disruptions to global supply chains have affected key sectors, the report noted, with Sri Lanka's tea industry facing losses estimated at USD 10 to 15 million per week due to export bottlenecks. Concerns were also raised over food security, with the assessment noting that 20% of households are unable to afford a minimum food basket.

Fiscal pressures have increased amid recovery and crisis response measures, the report said, pointing to additional spending commitments including a Rs. 500 billion supplementary budget allocation for Ditwah recovery and a Rs. 100 billion Middle East crisis response package.

The tourism sector has shown mixed developments, according to the assessment, with tourism earnings declining even as Sri Lanka recorded its highest ever May tourist arrivals in 2026, with 147,745 visitors.

To cushion the impact, the government has introduced several measures, including increasing the fertiliser subsidy to Rs. 30,000 per hectare, allocating Rs. 10,947 million for the programme, and providing a Rs. 100 billion support package covering fuel, electricity, fertiliser, fisheries and Aswesuma top ups.

The UN report stressed the importance of strengthening social protection systems, improving energy security and diversifying supply chains, in order to reduce the impact of future external shocks.