SOFIA – Bulgaria’s booming industry and services bounded ahead in the second quarter, surprising analysts and pushing annual real economic growth to 6.6 percent, official data showed yesterday. The figure beat the government’s forecast for 5.2 percent growth from April to June and outpaced the expansion seen in the same period a year earlier, when pre-election spending pushed the economy higher by 6.5 percent. For the first half of 2006, the economy grew by 6.1 percent, above the government’s forecast for 5.5 percent. «It’s clearly a very, very positive surprise. Nobody expected such a strong figure,» said Dresdner Kleinwort Wasserstein analyst Ivailo Vesselinov. «It’s really changed the outlook for the year as a whole. Now I think there’s no question that it will be over 6 percent. I think it will be closer to 6.5, actually.» Analysts said Bulgaria was following the regional trend of economies across Central and Eastern Europe outperforming expectations, in part because of robust eurozone growth. Domestically, the main drivers were industry and services, which grew by 9.0 percent and 4.7 percent respectively. A large part of the rise also came from fixed capital creation, which was up 20.3 percent on the year. Imports, fueled by a three-year boom in domestic lending that allowed Bulgarians to buy big-ticket, foreign-made retail items, were also a key factor, rising 11.4 percent on an annual basis. They outpaced exports, which rose by 10.2 percent. The private sector grew by 7.3 percent on an annual basis and created 67.6 percent of Bulgaria’s GDP. The public sector, which did not benefit from the same pre-election state spending as seen a year earlier, shrank by 0.9 percent. Despite the robust expansion, Bulgaria, the poorest EU candidate or member state except for Turkey, still lags behind regional peers like Romania and Slovakia, which posted growth of 7.8 and 6.7 percent respectively from April to June. Analysts said the data did not mean the government could take its foot off the gas in terms of fiscal reforms ahead of its expected membership in the European Union next year. Many in the Balkan state see EU entry and its accompanying demands as the only way to close the massive wealth gap with the richer West. «Measures for increased growth, such as lowering corporate tax and social security payments, would put the economy in a state where Bulgarian incomes can eventually reach European levels,» said Dimitar Chobanov, an analyst with the Institute for Market Economics.