Sri Lanka has now entered into new era of rapid socioeconomic development subsequent to ending the three-decade long war and achieving sustainable peace in 2009.As spelled out in the main government policy framework titled “Mahinda Chintana - Vision for the Future” the central development strategy is to focus on five specific sectors (Naval, Aviation, Commercial, Energy and Knowledge) as regional hubs. This approach is based on strategic location of the island nation and her strengths as well as emerging opportunities in the global and regional scenario. The economic performance achieved in 2010 was encouraging and demonstrating the prospects of fast growth. The purpose of this report is to discuss key socioeconomic and labour market trends as well as emerging opportunities and challenges. It is also intended to identify key policy areas for consideration to conquer challenges and to exploit emerging opportunities.