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Bulgaria's economy is in good shape; 2006 marked the ninth successive year of growth since the 1996/97 financial crash. Consumption and GDP are growing, investment, both foreign and overseas, is breaking records, unemployment levels, though still high in relative terms, are falling and imports and exports are continuing to increase at a robust rate.

In 2006 the Foreign Direct Investments (FDI) reached a record high of EUR 4,015 million. This is an increase of more than 70% in comparison to 2005. The FDI is boosted primarily by foreign property purchases, which accounted for 30% in the total investment flow for 2006 and more than doubled in comparison to 2005. Nevertheless, the FDI in manufacturing also indicated quite a serious growth accounting for EUR 777 million in 2006. This is almost 20% of the total FDI flow for the last year.

The industrial sector, which includes construction, achieved an annual growth of 8.3% in 2005 and 2006, as well as the tourism sector. However, challenges do remain: inflation is still high, 4.3% annual growth (state: end 2006) and the current account deficit stood at a record of EUR 3.88 billion in 2006 (EUR 2.43 billion in 2005), representing around 16% of GDP. In the future, Bulgaria's policymakers will have to negotiate the balance between caution and growth. Meanwhile there is a debate when Bulgaria will join the Eurozone – estimates differ between 2010 and 2012.

A solid role in this quite important trend has been played by the strong political commitment of the government and other state institutions in further pursuing a stable macroeconomic policy, reforms in pro¬moting the principle of rule of law and specific market measures encouraging the country.

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