Bulgaria's total public debt in the period from the middle of 2006 to the middle of 2007 has decreased from 33.5 per cent to 20.5 per cent of the country's GDP, according to Industry Watch (IW) research.

The analysis said, as quoted by Bulgarian National Radio, that all rating agencies had increased the government's credit rating over the past two years.

Investment increased by 45 per cent in the period 2005-2006, while foreign capital influx for the last 12 months until June 2007 totaled 6.3 billion euro as compared to 2.6 billion euro two years earlier.

Budget revenue exceeded 40 per cent of the GDP which helps the formation of a state budget surplus which in turn allows the government to decrease taxes, IW said.

A favourable business environment, high investment activity, and income and employment improvement are some of the factors that had a positive influence on steady credit growth in the non-financial sector despite administrative measures taken to regulate this expansion, the report said.

Industry Watch experts warned that harsh increase of the maximum social security income could lead to an increased social security burden.