Sri Lanka is passing through an acute economic crisis due to drain in foreign reserves which in turn has led in shortages of fuel, food, electricity, medicines, cement and other items in the country. Sri Lanka’s expenditure was more than its national income. Due to lack of foreign currency, country was not in a condition to pay for imports of staple foods and fuel, leading to acute shortages and very high prices. Sri Lankan government is hopeful that with the policy measures initiated so far and with the relief from covid-19 situation, it would overcome the crisis soon. This paper throws light on the economic crisis of Sri Lanka, causes for crisis, impact of crisis on the people and on the country, foreign countries aid to Sri Lanka, Galle face struggle against dynastic rule, role of government and measures to overcome economic crisis.