August is called as monsoon season in Srilanka. The weather is lot better compared to summer months of Srilanka. Yes tourism has taken a step back due to financial crisis, so it’s better to rethink and plan your trip to Srilanka.
August would be a good season to explore SriLanka. Do visit Kandy if you make your trip during that time as the Kandy Festival happens then. As for the financial crisis, you won't feel it much as a tourist except for seeing queues for gas/petrol/diesel and occasional powercuts. Even if there are protests, tourist places are mostly open and even if there is a curfew, tourist vehicles are allowed to be on the road. I just visited SriLanka in April 2022 and did not face any trouble as such.