International investors pay attention to negative headlines regarding Bulgaria's poor record on EU funds absorption, corruption and organised crime, but they always go beyond negative publicity, said Paulius Kuncinas, Eastern Europe regional editor at UK-based economic think-tank Oxford Business Group (OBG).

They double-check many other factors influencing investment decisions, such as labour market, macroeconomic stability and ease of doing business, he said, adding that the country remained an attractive investment destination.

Kuncinas said this at a June 9 news conference dedicated to OBG's fifth annual overview of Bulgarian economy, which took place in the attendance of Bulgaria's Foreign Minister Ivailo Kalfin. The overview is an objective view on Bulgaria from the outside, with first-hand information from decision makers from the political and business spheres, Kalfin said.

Bulgaria is no longer an emerging market where a foreign investor can enter, grow quickly and just as quickly scoop lofty profits, Kuncinas said in what was the main message of the report.

A number of key sectors, which for years have been serving as the growth drivers of Bulgarian economy, have reached the point of saturation.

"As growth rates of the banking, real estate, telecom and tourism fields gradually plateau, so will overall economic growth," Kuncinas said, adding that the trend would likely be visible from next year onwards. OBG's gross domestic product (GDP) growth forecast for this year is consonant with the governmental target of six per cent.

Deceleration dismisses the prospect for economic overheating, as a score of analysts have shown, according to Kuncinas. Yet he would not rule out that the ongoing liquidity squeeze and volatility on international financial markets could have, even if belated, impact on an open economy like Bulgaria's.

A safeguard against economic shocks, according to Kuncinas, is the peg of the Bulgarian lev to the euro. What is more, it's a stability mainstay in view of the euro's consistent performance over the past few years.

Yet Bulgaria has both short-term and long-term concerns to mind, Kuncinas said. While short-term considerations are the high current account deficit (at 21 per cent of GDP) and double-digit inflation, the analyst noted.

Reiterating the main reasons for inflation - the drought-prompted surge of food prices and boost in disposable income-driven consumption - Kuncinas noted that reasons driving inflation should not be domestic alone, adding that the entire region had been experiencing a pick-up in inflation.

The disciplined fiscal and monetary regime, Kuncinas said, has helped belay Bulgaria's inflation from soaring even higher. Taking Ukraine as an example, whose annual inflation was double Bulgaria's at 30 per cent, he said only 15 per cent of it was attributable to the factors in place in Bulgaria as well, the remainder coming from the insufficiently strict fiscal and monetary regulation.

In the long run, Bulgaria would face the challenge of adding higher value to the developing sectors and moving the country toward the knowledge-based economy principles.

"The business mantra of international investors is having the right skills for the right cost," the executive said. "Bulgaria will be gradually moving from its image of a cheap labour destination and should, therefore, find the proper anchors to keep international investors interested.