Countries that had low budget deficits, and strong external current accounts had room to spend more and to use fiscal measures to stimulate demand.
But Sri Lanka was among the countries that had weak fiscal and external current accounts.
"The recommendation for these countries would be that in order to get over the crisis both adjustments on the fiscal on the external side would be needed," Astrup told a seminar organized by the Society of Management Accountants of Sri Lanka.
Last year, many countries were trying to curb spending and demand, to control inflation. Now faced with a global economy slowdown, many countries were increasing spending to stimulate growth.
As Sri Lanka's foreign reserves were dwindling, there is pressure now to