Sri Lanka, Sept. 10 -- Sri Lanka must focus on smarter spending and fairer revenue collection to sustain its economic gains, the World Bank cautioned in a report published yesterday, as the country seeks to consolidate one of the sharpest fiscal adjustments in its history.

The report, 'Sri Lanka Public Finance Review: Towards a Balanced Fiscal Adjustment', noted that over the past three years, fiscal consolidation equivalent to nearly 8 percent of GDP restored macroeconomic stability.

However, the rapid adjustment has strained households and slowed growth, underscoring the need for the next phase of reforms to deliver more efficient and equitable results.

"Now that Sri Lanka has largely stabilized its economy, the challenge is to get b...