Relief, renewal and growth in Sri Lanka GDP soars after end of war unlocks dormant economy

MarketWatch March 12, 2012, 8:00

William Spain/MarketWatch

The view from the Sri Lanka Air Force-owned Marble Beach near Trincomalee.

COLOMBO, Sri Lanka (MarketWatch) — From the floor of the stock exchange to the former security checkpoints now plastered with advertising posters to the bustling energy of this South Asian capital’s streets, the signs of renewal are plain.

Sri Lanka’s economic recovery from its long and brutal civil war has been astonishingly fast, though perhaps not so swift as the sudden, blood-soaked final chapter of that 25-year-old conflict in early 2009.

Nor has it been so decisively concluded.

While GDP growth, estimated at north of 8% last year, is among the most robust in the world, and the stock market’s three-year return would make Warren Buffett’s eyes bug out, a rising debt load, widening trade imbalance and soaring fuel prices could endanger or even derail much of the recent progress.

Still, the once-feared Tamil Tigers, who at their peak ruled a third of the nation’s land area, are dead, dying or scattered. Massive sums are being plowed into new roads, bridges, port facilities and other infrastructure.