New numbers show Bulgaria failed to hit its mark for foreign direct investment (FDI) last year.

According to a Jan. 19 article from the Independent Balkan News Agency, FDI in the first 11 months of 2016 was $1 billion, or 2% of GDP. For contrast, foreign direct investment was a total of $1.88 billion in the first 11 months of 2015.

The report cites numbers from the Bulgarian National Bank, which showed investment in equities, including real estate, sunk to around one-third of 2015 investment levels. Foreign real estate investment on its own ticked up slightly from around $52.99 million in 2015 to nearly $56.17 million in 2016.

The Bulgarian National Bank also identified the nations with the largest investment values in Bulgaria: the Netherlands, Germany and Luxembourg.

Articles covering the shifts in Bulgarian FDI over the years also paint a complex picture of what it means for foreign companies to do business in the country. A November 2016 Financial Times article covers some of the benefits of coming to Bulgaria: among them, cheap labor and tax breaks, as well as geopolitical positioning.

“We’re a natural bridge between east and west ... Companies can invest in Bulgaria and expand across Europe,” Stamen Yanev, executive director of InvestBulgaria, told the Financial Times.

Still, the article underscores the need for more progressive government, suggesting that when it comes to transparency issues and obstacles to a modern, reformed financial system, Bulgaria has a lot to live down.

For more analysis, Balkan Business Wire spoke with Rahul Koli, a research analyst in investment research and analytics at Aranca, a research firm. Koli has nearly four years of equity research experience across the GCC region.

Koli said Bulgaria received FDI of $1.69 billion for the entire year of 2015. The target for 2016, he said, was $2.01 billion.

The 11-month data, Koli said, showed that Bulgaria would not come close to its FDI target, essentially cutting that goal almost half.

Koli said Bulgaria has not been able to move ahead financially in some ways since the 2008 financial crisis, when global markets sunk.

“During the pre-financial crisis from 2008 to 2009, Bulgaria used to receive FDI inflows on the order of 6 to 7 billion euros ($6.35 billion to $7.41 billion), which it has never been able to achieve post-crisis,” Koli said.

Echoing the remarks of other analysts who consider Bulgarian economic advancement to be hampered by mitigating factors inside the country, Koli said that the government poses some major challenges for better economic outlooks.

“Aspects such as corruption and red-tapism remain the major hindrances for the faster economic growth of the country,” Koli said, citing a recent election.

The election has brought political uncertainty to the country, which has affected its economic climate, Koli said. 

Koli suggested that changes to government practices could jump-start economic activity within the country in a new way.

“Going forward, economic growth and FDI in the country will largely depend on reforms taken by the new government and overall economic environment particular in the EU,” Koli said.