Bulgaria's economy would grow by a real six per cent in 2008, fueled by continued growth in the industry and services sector, as well as the recovery of its agriculture, economic policy thinktank Center for Economic Development (CED) forecast on February 12 2008.

Incoming EU structural finds would also have a positive impact, CED representatives told a news conference at which they presented a report on Bulgaria's economy in 2008.

The thinktank's experts believe Bulgaria's economic growth to have slowed down to 5.5 per cent in 2007, compared to 6.1 per cent a year earlier. The National Statistics Institute is expected to release the full-year data in March.

CED expects Bulgaria’s current account deficit to exceed 20 per cent of gross domestic product (GDP) in 2007, but projected its growth to slow down in 2008. However, the thinktank did not expect it to decrease, since its main driving force, the trade gap, was unlikely to shrink. Even though exports were expected to go up, productivity would remain low and EU subsidies would further boost imports, CED said.

Despite the global credit crunch, foreign direct investment in 2008 would reach six billion euro, an increase over last year's 5.5 billion euro, but to keep investors interested in the long term, the Cabinet would have to prove its commitment to structural reforms that would improve the business climate, the report's authors said.

CED also believes it unlikely that the combination of factors, which caused inflation to jump to a seven-year high of 12.5 per cent at end-December, would repeat itself this year. But the thinktank still forecast it to remain above the EU average over the next several years.