Rajapakse, 60, narrowly scraped through in Thursday's ballot after pledging to cut the prices of products ranging from milk powder to fertiliser.
Sri Lanka's 20-billion-dollar economy is heavily dependent on foreign remittances, clothing and tea exports and tourism.
Analysts said voters from the Sinhalese majority appeared to have been swayed by the populist subsidies, grants and tax breaks offered by Rajapakse.
Among the immediate priorities for Rajapakse is to tackle politically-unpopular reforms in the loss-making energy sector, privatisation and infrastructure.
"That should unleash a new source of growth," said Alastair Corera, country head of Fitch Ratings Lanka.
Rajapakse will also have to deal with rebuilding tsunami battered coastlines. The country has received aid pledges worth 3.2 billion dollars for reconstruction.
He has rejected plans to share tsunami aid with Tamil Tiger rebels, opposed autonomy for minority Tamils, pledged to halt privatisation of state assets and foster an inward-looking national economy.
Foreign aid pledged is more than enough to cover reconstruction costs but much of the money has been tied by donors to progress in the island's stalled peace process.
Colombo's tiny stock market panicked after Rajapakse's victory, with the benchmark All Share Price Index closing 175 points, or nearly seven percent, down.
Some investors said they were not convinced that the new president could create 2.5 million jobs and cut prices without slowing economic growth and holding up peace talks with Tamil Tiger rebels.
"Everybody's dumping -- there are net sellers in the market today," said Vajira Premawardhana, head of research at LOLC Securities.
"The market could fall as a knee-jerk reaction to the prime minister's win, because of the perception that not much headway will be made on the peace front and toward progressive economic policies. But who knows, things could change," said Premawardhana.
"We still don't know how he plans to fund a welfare state, things may change when he takes office," said Channa Amaratunga, economist and chief investment officer at Boston Asset Management.
"Most policies of both main candidates are similar, the difference is small, the rhetoric is one thing, what happens is another thing," said Murtaza Jafferjee, managing director of JB stockbrokers.
A survey by the privately-run Centre for Policy Alternatives, showed 32 percent of respondents ranked the cost of living as the most important issue ahead of peace when selecting a presidential candidate.
"The cost of living has gone up, we are not denying it, but the national issue (of the peace process) overrode economic issues this time," said Lasantha Munasinghe, a brand manager attached to a private conglomerate.
Under the current coalition, the economy is set to expand by six percent this year, the fastest pace since 1997.
The growth momentum will be maintained next year, according to Treasury Secretary P B Jayasundera. The economy expanded 5.4 percent in 2004, according to the Central Bank. - AFP
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