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"Relatively high fiscal deficits and double digit inflation were the main macro-economic issues resulting in high levels of public debt, high interest rates and unstable currency...
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," Sarath Amunugama, minister for International Monetary Co-operation said.
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Amunugama was speaking in Washington at the annual meetings of the International Monetary Fund and World Bank.
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He is Sri Lanka's governor for the Fund.
"Prudent monetary and credible fiscal policies that were implemented by my government has helped bring down inflation to a manageable level, and has maintained single digit inflation since 2009," he said.
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"The fiscal consolidation process has steadily brought down fiscal deficits, from 10 percent of GDP (gross domestic product) to below 7.0 percent in 2011.
"Our medium term macro-economic program targets further fiscal consolidation aiming at bringing down the debt to GDP ratio below 60 percent by 2016.
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"
Deficit spending by Sri Lanka's rulers has been identified by analysts as