Growing foreign direct investment (FDI) has pushed Bulgaria higher in the Economist Intelligence Unit's (EIU) latest world investment rankings.

On the back of improving business environment, EU integration and sustained economic growth, FDI last year reached a record USD 5,2 B, the equivalent of 16,4% of gross domestic product (GDP).

However, with most privatisations complete, it is expected to stabilise around USD 2,3-2,5 B over the period 2007-2011.

Nevertheless, EIU's estimates for the period put Bulgaria in ninth place as a share of GDP, at a figure 6,15%, higher than any of its neighbours in the region.

Bulgaria is also among the top ranked countries in terms of investment projects, with 286 projects last year, more than double compared to 2005, ranking tenth in the world and outperformed only by Russia, Romania and Poland in eastern Europe.

The energy sector remains the only area in which significant privatisations are still to be carried out, but capital-intensive investment projects in the water, electric power, coal mining and transport sectors should keep annual inflows of FDI high over the forecast period, EIU said.

With most of the government's industrial assets already sold off, FDI has shifted from manufacturing towards real estate, transport and domestic trade, both wholesale and retail, in recent years and the trend is expected to remain unchanged in the medium term.

Overall, in terms of business environment for investment, Bulgaria ranked 44th among 82 countries that the report looks at, rising five places, with a score of 6,77 on a scale of 10.

It scored better on components such as political stability, foreign trade controls and taxation, but lost ground in the financing and opportunities categories.