Foreign Direct Investment in Bulgaria will keep its historically high levels, following the post-1997 increase in FDI-inflows, the Economist Intelligence Unit (EIU), the specialized team for analyses and surveys with the British magazine The Economist, forecast.

According to EIU investment prospects report Bulgaria’s economic stability, ongoing recovery, further reforms and assumed reduction in regional risk should attract investors.

FDI will also be boosted by considerable foreign investment in infrastructure – electric power, water works, coal mining and transport. As a result the FDI inflows are expected to average about USD 1 BLN per year in the period 2003-2005. Bulgaria’s better business environment for the period 2001-2005 account for the jump up of seven places in the EIU’s rankings table.

The macroeconomic stability is expected to be threatened mainly by large current account deficits, as a result of the country’s open but rather small-scale economy. Investors’ confidence has been boosted by the prospect of EU membership as well. The Economist Intelligence Unit also notes improvements in the policy towards foreign investors. Low labour costs and relatively high qualification are attractions.

In the opinion of the EIU however these advantages are offset by high social security costs and low productivity.