Bulgaria’s economy will expand by about six per cent, economic think-tank Centre for Economic Development (CED) said in its quarterly economic report released on May 12.

The January-March 2008 data give grounds to believe that economic growth would be higher than in the same period a year ago, CED analysts told a news conference. While last year it was at 5.5 per cent, in the first quarter of this year it was expected to reach six per cent.

The CED was also upbeat about inflation, despite its pick-up in the opening months of the year. It turned down gloomy forecasts for double-digit inflation for the full year. Despite the high inflation early this year, the CED expects deflation in the May-August period.

The think-tank's analysts argued that the current account deficit will grow in absolute terms, but in percentage terms would remain on par with last year, at 22 per cent of gross domestic product.

In regard to foreign direct investments, the CED believes that they would remain at 6.5 billion euro, on par with 2007.

A positive factor in economic development was that the pace of export growth already surpassed that of import. The CED hailed plans of the Economy and Energy Ministry to develop an export promotion strategy, as well as create an export promotion agency. The think-tank also said they won a public bid for an analysis about the state of Bulgarian exports.

The think-tank, however, sounded alarm over faltering reforms in education and health care as well as the delay in the implementation of infrastructure projects in the transportation sector.