Economy of Bulgaria

Economy of Bulgaria

Business Park Sofia Trakia Economic Zone Summer Tourism Resort Winter Tourism Resort Bulgarian National Bank From top to bottom, left to right: Business Park Sofia, Trakia Economic Zone, Tourism in Bulgaria, Bulgarian National Bank
Currency	Bulgarian lev (BGN)
Fiscal year	Calendar year
Trade organisations	EU, WTO and BSEC
Country group	Developing/Emerging[1] Upper Middle-income economy[2] European (EU) economy in ERM II with improving living standards
Statistics
Population	6,447,710 (2022)[3]
GDP	$111 billion (nominal, 2024)[4] $229 billion (PPP, 2024)[4]
GDP rank	69th (nominal, 2023) 72nd (PPP, 2023)
GDP growth	3.4% (2022) 1.7% (2023) 3.2% (2024)[4]
GDP per capita	*$17,320 (nominal, 2024)[4] *$35,850 (PPP, 2024)[4]
GDP per capita rank	62nd (nominal, 2023) 56th (PPP, 2023)
GDP by sector	agriculture: 5.1% industry: 27.5% services: 67.4% (2016)[5]
Inflation (CPI)	8.5% (2023)[4]
Population below poverty line	22.1% in poverty (2020)[6][7] 32.2% at risk of poverty or social exclusion (2022)[8] 5% on less than $6.85/day (2020)[9]
Gini coefficient	38.4 medium (2022)[10]
Human Development Index	*0.795 high (2021)[11] (68th) *0.701 high IHDI (2021)[12]
Labour force	3,283,797 (2019)[13] 72.4% employment rate (2018)[14]
Labour force by occupation	agriculture: 6.8% industry: 26.6% services: 66.6% (2016 est.)[15]
Unemployment	4.8% (January 2022)[16] 9.2% youth unemployment (15 to 24 year-olds; 2022)[17]
Average gross salary	BGN 2,013/ €1,029 / $1,110 monthly (January 2024)
Average net salary	BGN 1,608 / €806 / $870 monthly (January 2024)
Main industries	electricity; tourism; construction; non-ferrous metal mining industry; food, beverages, tobacco; machinery and equipment, automotive parts; chemical products, petroleum refinement (fuels); logistics and transportation; IT sector and outsourcing providers for specialized services.
External
Exports	$55.3 billion (2022)[18]
Export goods	refined petroleum, petroleum gas, electricity, refined and raw copper, wheat, seed oils, sunflower seeds, precious metal ore, prep binder for foundry, packaged medicaments, motocycles and cycles, automotive parts, copper plating, raw metals, scraps, electrical equipment, baked goods[19]
Main export partners	Romania 16.4%  Germany 13.5%  Italy 7.23%  Turkey 5.17%  Greece 5.07%  Poland 2.94%  France 2.84%  Netherlands 2.68%  United States 2.58%  Belgium 2.51% (2022)[20]
Imports	$56.5 billion (2022)[21]
Import goods	crude petroleum, petroleum gas, copper ore, cars and automotive parts, tractors, prepr binder for foundry, packaged medicaments, refined petroleum, telephones, semiconductor devices and computers, sunflower seeds, seed oils, raw and refined metals, foods, clothes[22]
Main import partners	Germany 10.1%  Russia 9.9%  Turkey 8.83%  Romania 6.92%  China 6.02%  Greece 5.71%  Italy 5.63%  Netherlands 4.17%  Poland 3.32%  Hungary 3.15% (2022)[23]
FDI stock	$46.92 billion (2017)[15] Abroad: $5.868 billion (2017)[15]
Current account	$2.562 billion (2017)[15]
Gross external debt	$42.06 billion (2017)[15]
Public finances
Government debt	20.4% of GDP (2019)[24] BGN 24.205 billion (2019)[24]
Budget balance	BGN 4.887 billion deficit (2021)[24] −3,9% of GDP (2021)[24]
Revenues	BGN 47.59 billion (2021)[24]
Expenses	BGN 52.48 billion (2021)[24]
Economic aid	€6.9 billion from European Structural and Investment Funds (2007–2013)[25] €9.88 billion from European Structural and Investment Funds (2014–2020)[26]
Credit rating	Standard & Poor's:[27] BBB (Domestic) BBB (Foreign) A− (T&C Assessment) Scope:[28] BBB+ Outlook: Positive
Foreign reserves	$28.38 billion (2017)[15]
All values, unless otherwise stated, are in US dollars.

The economy of Bulgaria functions on the principles of the free market, having a large private sector and a smaller public one. Bulgaria is an industrialised high-income country according to the World Bank,^[29] and is a member of the European Union (EU), the World Trade Organization (WTO), the Organization for Security and Co-operation in Europe (OSCE) and the Organization of the Black Sea Economic Cooperation (BSEC). The Bulgarian economy has experienced significant growth (538%), starting from $13.15 billion (nominal, 2000)^[30] and reaching estimated gross domestic product (GDP) of $86 billion (nominal, 2022 est.)^[30] or $203 billion (PPP, 2022 est.), GDP per capita of $31,148 (PPP, 2022 est.),^[31] average gross monthly salary of 2,009 leva (1,027 euro) (April 2023),^[32] and average net monthly salary of $2,102 (adjusted for living costs in PPP) (2022).^{[33][circular reference]} The national currency is the lev (plural leva), pegged to the euro at a rate of 1.95583 leva for 1 euro.^[34] The lev is the strongest and most stable currency in Eastern Europe.^[35][36]

The strongest sectors in the economy are energy, mining, metallurgy, machine building, agriculture and tourism. Primary industrial exports are clothing, iron and steel, machinery and refined fuels.^[37]

Sofia is the capital and economic heart of Bulgaria and home to most major Bulgarian and international companies operating in the country, as well as the Bulgarian National Bank and the Bulgarian Stock Exchange. Plovdiv is the second-largest city and has one of the largest economies in Bulgaria. Varna is the third largest city in Bulgaria and the largest city and seaside resort on the Bulgarian Black Sea Coast. Situated strategically in the Gulf of Varna, economically, Varna is among the best-performing and fastest-growing Bulgarian cities.

The Bulgarian economy has developed significantly in the last 26 years, despite all difficulties after the disband of Comecon in 1991. In the early 1990s, the country's slow pace of privatization, contradictory government tax and investment policies, and bureaucratic red tape kept the foreign direct investment (FDI) among the lowest in the region. Total FDI from 1991 through 1996 was $831 million.

In December 1996, Bulgaria joined the World Trade Organization. In the years since 1997, Bulgaria begun to attract substantial foreign investment. In 2004 alone, over 2.72 billion euro ($3.47 billion) were invested by foreign companies. In 2005, economists observed a slowdown to about 1.8 billion euro ($2.3 billion) in the FDI, which is attributed mainly to the end of the privatization of the major state owned companies.

After joining the European Union in 2007, Bulgaria registered a peak in foreign investment of about 6 bln euro. Low productivity and competitiveness on the European and world markets alike due to inadequate R&D funding, however, still remain a significant obstacle for foreign investment.^[38] Nevertheless, according to the latest Annual report of the Economic Research Institute at the Bulgarian Academy of Sciences, the average salary in Bulgaria is a quarter (1/4) of the average salary in the European Union, and should be two times higher when the labour productivity is calculated in the formula.^[39]

During the Great Recession, Bulgaria saw its economy decline by 5.5% in 2009, but quickly restored positive growth levels to 0.2% in 2010, in contrast to other Balkan countries.^[40] However, the growth continued to be weak in the following years, and GDP only reached pre-crisis levels in 2014.^[41]