Bulgaria’s current account deficit was to reach to 20 per cent of the gross domestic product (GDP) by the end of 2007, an October review on Bulgaria’s economy by Raiffeisen Research said, as quoted by Dnevnik daily on October 30.

The forecast was too optimistic because the most recent data, provided by the Bulgarian National Bank, for the end of August showed that the current account gap was 19.6 per cent of GDP, Dnevnik said. The authors of the report found it positive that foreign direct investment was already covering the entire deficit. They expected that 2008 would see Bulgaria’s current account deficit shrinking to 16.5 per cent of GDP.

Raiffeisen Research moved up its forecasted figure for the end-year inflation from eight per cent to 10 per cent. The reason was the record high inflation registered in September, 13.1 per cent on an annual basis. The high level of the consumer price index was due to to the increase in the prices of foods, which however were one-time factors and their effect was to fade away soon. Hence, the analysts predicted that Bulgaria’s inflation would reach no more than five per cent at the end of 2008.

Raiffeisen Research’s last review also pointed out the constantly increasing problem of the lack of qualified personnel in Bulgaria and warned that almost 90 per cent of all local companies would soon find it difficult to find proper employees.