BIA analysis shows collapse of foreign investment in Bulgaria in the period 2007-2017.
“The investment climate determines the economy of one country, and the indicator for business climate quality is the size of investments, in particular foreign investments. In the period 2007-2017 the total volume of investments in Bulgaria remained unchanged (about BGN 18 billion a year, with a peak in 2008 when it was BGN 24 billion), thanks mainly to local investments, i.e. of the initiative of Bulgarian entrepreneurs.”
This was announced by the Executive President of BIA Radosvet Radev at a press conference today (August 28, 2018), during which the results of the analysis of foreign investments in Bulgaria in the period 2007-2017 were presented. The analysis was developed by an expert team of BIA, headed by Kamen Kolev – Vice President of BIA, who also took part in the press conference.
From the analysis presented today, it is clear that for the 10-year period considered, foreign direct investment (FDI) has fallen 10 times in absolute terms and 14 times as a percentage of GDP. From BGN 17.7 billion in 2007, FDI is down to BGN 1.8 billion in 2017, and as a percentage of GDP from 28% in 2007 to 2% in 2017. “Already even funds from emigrants are more than FDI”, Radosvet Radev said during the presentation.
“It is true that corporate taxation in Bulgaria is attractive, but this is not a sufficient prerequisite for attracting external resources. Until recently, we had a competitive advantage in terms of quality workforce, but now this advantage is also questionable because the number of workers does not suffice,” Radosvet Radev said.
The Vice President of BIA Kamen Kolev stressed that the optimum level of FDI for each economy is about 10% of GDP, while in our country they do not exceed 2% of GDP. According to him, peace and security are the most important factors for investors, and this means stable (with no frequent changes) regulatory framework, guaranteed property security and quality justice, low level of regulation and quality administrative service, incl. electronization of administrative services. Another important prerequisite for making a positive investment solution is the availability of manpower. Therefore, our primary task is to provide sufficient (both in number and in quantity) qualified staff, especially for new technological processes. Last but not least, it is important for each investor to be provided quality infrastructure.
Source: BIA (full text in Bulgarian and graphics)