Bulgaria

Capital: Sofia

Local time:
It is %T:%M %A in Sofia

GDP growth rate: 3.7% in 2013

FDI stock: 47 971 million USD in 2010

Economic trends

Bulgaria experienced a strong growth starting from 1996. Successive governments showed a commitment to establishing tax and economic reforms, but they did not manage to control inflation and the current account deficit. During this time, Bulgaria was attracting a lot of FDI; however, the country has been badly hit by the financial crisis of 2008. As a member of the EU since 2007 and therefore subject to certain economic criteria, Bulgaria has since introduced a series of measures aimed at improving its economy and reducing its public deficit.

Today enjoying relative financial stability and having one of the lowest debts on the continent, of only 16% of GDP, since its entrance into the EU, Bulgaria has continues its rapid transition, which was however restrained by the 2011 European crisis. The Bulgarian authorities have now made fiscal governance a priority and the government has implemented an austerity plan to deal with the consequences of the crisis, capping state expenditure, limiting the fiscal deficit to 3% and lowering the public debt.

The country faces many other challenges, including problems of corruption within the administration, a weak judicial system and the spreading of organized crime.

Main branches of industry

Traditionally an agricultural country, Bulgaria is now considerably industrialized. The country has a skilled and inexpensive workforce. Nearly a third of the population works in the industrial sector. Bulgaria's main mineral resources include bauxite, copper, lead, zinc, coal, lignite (brown coal), iron ore, oil and natural gas.

Industry still depends on heavy manufacturing sectors (metallurgical, chemical, machine building), which were developed during the socialist period. However, the most dynamic sectors are textile, pharmaceutical products, cosmetic products, and now, the mobile telephone industry and software industry.

International trade

Since joining the European Union, Bulgaria has experienced considerable growth of its trade, despite its large trade balance and recurring deficits. More peripheral than Romania, Bulgaria is less dependent on other European countries, which nevertheless still represent 50% of its exports and imports. The Bulgarian government has a proactive European attitude and trade remain critical to the development of the country.

Bulgarian exports go mainly to Italy, Turkey, Belgium, Greece, the United States and France. Bulgaria mainly exports semi-processed goods and unprocessed products. The country's main imports are  food products, fuel, energy and capital goods from Germany, Italy, Russia, Greece, France and Austria. The rise in energy prices has made Russia the leading supplier of Bulgaria, followed by Germany and Italy.

Bulgaria's foreign trade was indirectly affected by the global economic crisis, insofar that Bulgaria's main partner countries, which are in majority European countries, reduced their orders. The current difficulties of the EU economies further worsen this situation, although Bulgarian exports have shown resistance and they are stagnating rather than regression. The case in point was Greece, which was severely affected by the financial crisis and, therefore, strongly reduced its imports from Bulgaria. Considering the country's strengths, Bulgarian foreign trade should resume growth in 2012, depending on the economic improvement of its European partners.