The influx of Foreign Direct Investment (FDI) will continue to increase in 2008 and could reach 6 bln euro towards the back end of the year, local research institute Center for Economic Development (CED) said in its Q4 2007 overview.

According to the CED analysts, there is no reason to anticipate that FDI streams could either be diverted elsewhere or hit a softer patch.

'The country has great potential and remains attractive for investors. There are no indications for an FDI decrease over the long term.'

To remain on the radar, however, Bulgaria should engage more actively in structural reforms and should take more hands-on measures to improve the business environment, said CED.

Despite the projected FDI increase, CED expects Bulgaria's c/a deficit growth to slow down in 2008 as exports start to catch up to imports. The forecast is based on positive outlook for the farming sector and accelerated development of export-oriented industries as investment made in the past couple of years starts to pay off.

Although Bulgaria is currently running one of the biggest c/a deficit around, it poses no immediate threat to the economy because it is the result of surging investment goods imports, said the CED analysts.

The CED inflation target for 2008 is 6%. Inflationary pressures will remain strong over the near-term, making it impossible for the country to join the eurozone.

After economic growth moderated as expected in Q4 2007 it is expected to average out at 5.6% for the full-year and pick up to just over 6% in 2008, said CED.

Source: www.news.dnevnik.bg