Bulgaria, Buoyed by a real-estate boom and an invitation to join the European Union on January 1, should attract a record 3.0 billion euros in foreign investment this year, the head of its investment agency said on Thursday.
Foreigners are building hotels, offices and shopping malls at a blistering pace, adding to investments in energy, banking and industry that are slowly lifting the poor Balkan state's economy.
Stoyan Stalev, head of the Invest Bulgaria Agency, said the EU executive's decision last month to let Bulgaria join in 2007 - instead of ordering a one year delay - should help boost investment over last year's 1.9 billion euros.
"I hope we reach three billion euros this year. I think it's realistic, if we take into account that in the first half of the year we reached 1.5 billion," he told Reuters in an interview.
"Our experience is that the second half is always more dynamic... And next year I expect it will not slow down." Investors are attracted to Bulgaria's cheap, well educated workforce - wages average around 160 euros a month - but often say corrupt officials and powerful local business interests prevent access to some sectors.
Stalev said EU membership would help address these complaints and cut red tape as Bulgarian officials and companies became more accustomed to the wider European common market.
"EU entry will improve the mentality of investors and local entrepreneurs and improve the strength of the state to combat unlawful competition developments," he said. In 2005, foreign investment fell 18 percent and covered only 65 percent of Bulgaria's 11.9 percent of GDP external gap. The deficit was 1.8 billion euros, or 7.6 percent of GDP, through July of this year, and is expected to double by the year's end.
Among other projects, Spanish real estate company Riofisa plans to invest 335 million euros in a commercial park in Sofia and French retailer Carrefour is building the first of several planned hypermarkets for 82 million euros. Non real-estate deals include a $1.4 billion power plant launched by US energy firm AES and a $120 million refinery from Austrian Petromaxx Energy Group.
Stalev welcomed the enthusiasm in tourism and real estate markets but said the sectors could be coming saturated. He particularly warned companies to have realistic expectations from Bulgarian consumers, who will be the bloc's poorest citizens when they join.
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