Economic and Political Overview

flag Bulgaria Bulgaria: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

The Covid-19 pandemic hit Bulgaria at a time when its economy was performing well. Before the sanitary crisis, a series of structural reforms, the highly successful integration of Bulgarian manufacturing firms into world production chains, and sound macroeconomic management had led to five years of growth rates above 3%, rapidly rising real wages, and historically low unemployment. However, the country recovered well and in 2023 GDP grew an estimated 2%, according to the latest figures from the EU Commission. Despite encountering diminished external demand, increased interest rates within the euro area, and sustained price pressures, private consumption notably expanded, particularly in the initial half of the year. This growth was bolstered by a robust labor market, enhanced consumer confidence, reduced inflation, and vigorous lending activity. Real GDP is expected to grow by 1.9% in 2024 and by 2.5% in 2025, with domestic demand as the main growth driver (EU Commission; 3.2% and 3.%, respectively, according to the IMF).

The country's public finances are relatively strong, with a low debt-to-GDP ratio compared with EU countries, estimated at 21% in 2023. Nevertheless, the IMF expects the ratio to grow over the forecast horizon, to 22.9% this year and 25.2% in 2025. The majority of government debt in Bulgaria is fixed-rate and has a long average maturity, which mitigates Bulgaria's vulnerability to monetary tightening overseas. On average, general government interest payments are expected to amount to 1.6% of revenues from 2023 to 2025 (Fitch Ratings). The IMF projected a 2.7% GDP budget deficit in 2023, influenced by lower energy support costs, increased social and capital spending, and higher public sector wages. Despite Bulgaria's history of fiscal responsibility, the current government may lean towards slightly wider deficits in the medium term to enhance public sector investments and address social inequalities. Anticipated deficits are 3.1% of GDP in 2024 and 3.5% of GDP in 2025. Inflation fell from 14.3% at the close of 2022 to an average of 8.5% in 2023, with all sectors contributing to this decline, particularly food prices. The slowdown in service inflation was mainly due to transport and catering services, which are closely tied to energy and food costs. Decreases in food and energy prices helped stabilize inflation expectations and prevented a significant wage-price cycle. Annual inflation is projected to significantly slow to 3% in 2024 (IMF).

During 2023, businesses managed to maintain high levels of employment and achieve moderate increases in nominal wages. Albeit increasing slightly, the unemployment rate remained relatively low at 4.6%, and is expected to gradually decline to 4.2% by 2025. Bulgaria is classified as an upper-middle-income country, with a GDP per capita (PPP) estimated at USD 33,582 in 2023 by the World Bank, compared to an EU average of USD 54,249. Nevertheless, income inequality in Bulgaria is among the highest in the EU, and almost 32.2% of the population is at risk of poverty (the second-highest rate in the EU after Romania).

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 89.12103.10110.34117.50123.82
GDP (Constant Prices, Annual % Change) 3.41.73.23.02.9
GDP per Capita (USD) 13,82116,08717,32018,55519,671
General Government Balance (in % of GDP) -1.1-2.7-3.1-3.5-2.8
General Government Gross Debt (in % of GDP) 21.821.022.925.226.8
Inflation Rate (%) n/a8.53.02.12.0
Unemployment Rate (% of the Labour Force) 4.24.64.44.24.2
Current Account (billions USD) -0.610.000.08-2.15-0.67
Current Account (in % of GDP) -0.70.00.1-1.8-0.5

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

Traditionally an agricultural country, Bulgaria is now considerably industrialized. In fact, the agricultural sector only accounts for 3.9% of GDP and employs 6% of the workforce (World Bank, latest data available). The main crops are sunflower, tobacco, and wheat. Around 46% of the country’s territory is considered agricultural land. The total number of agricultural holdings is 132,742, while the total number of registered farmers in 2021 was 76,372 (EU Commission, latest data available). According to preliminary NSI data, the total output of the agricultural industry at basic prices in 2023 stood at BGN 10,445.9 million, which was 19.1% lower than in the previous year. The decrease was due to a drop in prices by 15.0% and a decrease in volumes by 4.8%.

The industry represents 25.5% of the GDP, and 30% of the workforce is employed in the sector. It continues to rely heavily on the manufacturing sub-sectors (metallurgical, chemical, machine-building), which are estimated to contribute to 14% of GDP (World Bank). However, the most dynamic sectors are textile, pharmaceutical products, cosmetic products, mobile communication, and the software industry. Bulgaria's main mineral resources include bauxite, copper, lead, zinc, coal, lignite (brown coal), and iron ore.

The tertiary sector has more than doubled its contribution to the country’s economy since the end of the communist system, accounting for 59.6% of GDP and employing around 64% of the workforce. Tourism is one of the fastest-growing sectors: it was estimated to contribute 3.1% of GDP before the pandemic. The sector showed signs of recovery in 2023, when Bulgaria welcomed 12.6 million tourists, 16% more than the previous year, equalizing the level recorded in 2019. According to the latest figures from the European Banking Federation, 25 banks are currently operating in Bulgaria, seven of which are foreign bank branches. The top five banks hold approximately 66.9% of all assets.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 6.3 30.8 62.9
Value Added (in % of GDP) 4.4 26.0 57.7
Value Added (Annual % Change) -0.8 11.9 1.0

Source: World Bank - Latest available data.

 

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Monetary Indicators 20162017201820192020
Bulgarian Lev (BGN) - Average Annual Exchange Rate For 1 MUR 0.050.050.050.050.04

Source: World Bank - Latest available data.

 
 

Find out all the exchange rates daily on our service Currency Converter.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
70,4/100
World Rank:
35
Regional Rank:
20

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.49/10
World Rank:
45/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Since joining the European Union, Bulgaria has experienced considerable growth in trade, despite a large trade imbalance and recurring deficits. The country is very open to foreign trade, which represents 138% of its GDP (World Bank, latest data available). Bulgaria mainly exports manufactured goods classified chiefly by material (21.5%), machinery and transport equipment (20.6%), miscellaneous manufactured articles (13.6%), chemical and related products (11.8%), mineral fuel, lubricants, and related materials (11.5%); while imports are led by machinery and transport equipment (26.5%), mineral fuel, lubricants, and related materials (16.8%), manufactured goods classified chiefly by material (16.0%), chemical and related products (14.1%), crude materials, inedible (except fuel, 8.9% - data INS).

Bulgaria’s main export destinations in 2022 were Germany (14.1%), Romania (10.2%), Italy (7.5%), Greece (6.5%), and Turkey (6%); whereas imports came chiefly from Russia (12.2%), Germany, and Turkey (10.8% each), Romania (8.4%), Italy (6.8%), and Greece (6%). Overall, the EU accounted for 65.2% and 55.2% of total exports and imports, respectively (data INS).

According to the latest figures from WTO, in 2022 exports of goods rose by 22%, at USD 50.2 billion, with imports increasing at a faster pace (+25.6%), totaling USD 58 billion. The country has a structural trade deficit; however, it is a net service exporter: it exported USD 12.5 billion worth of services, importing only USD 6.9 billion in 2022. Preliminary data by the National Statistical Institute show that in 2023, exports of goods from Bulgaria to third countries saw a decline of 2.9%, totaling BGN 31.38 billion. Meanwhile, imports of goods plummeted by 19.7%, reaching a total of BGN 38.76 billion.

 
Foreign Trade Indicators 20182019202020212022
Imports of Goods (million USD) 37,85637,66335,05646,21058,049
Exports of Goods (million USD) 33,61733,34031,95441,15750,239
Imports of Services (million USD) 5,9765,9814,7536,0486,897
Exports of Services (million USD) 10,85311,4608,34210,87512,497
Imports of Goods and Services (Annual % Change) 5.85.2-4.310.910.5
Exports of Goods and Services (Annual % Change) 1.74.0-10.411.08.3
Imports of Goods and Services (in % of GDP) 63.260.754.259.667.7
Exports of Goods and Services (in % of GDP) 65.763.956.161.368.5
Trade Balance (million USD) -3,201-3,256-2,256-3,379-5,098
Trade Balance (Including Service) (million USD) 1,6122,1991,3441,443459
Foreign Trade (in % of GDP) 128.9124.6110.3121.0136.3

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2022
Germany 14.0%
Romania 10.1%
Italy 7.5%
Greece 6.5%
Türkiye 5.9%
See More Countries 56.1%
Main Suppliers
(% of Imports)
2022
Russia 10.8%
Germany 10.8%
Türkiye 8.4%
Romania 6.9%
Italy 6.0%
See More Countries 57.2%

Source: Comtrade, Latest Available Data

 
 

Main Products

50.3 bn USD of products exported in 2022
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 7.9%
Sunflower-seed, safflower or cotton-seed oil and...Sunflower-seed, safflower or cotton-seed oil and fractions thereof, whether or not refined, but not chemically modified 3.3%
Copper, refined, and copper alloys, unwrought ...Copper, refined, and copper alloys, unwrought (excl. copper alloys of heading 7405) 3.2%
Wheat and meslinWheat and meslin 2.9%
Copper, unrefined; copper anodes for electrolytic...Copper, unrefined; copper anodes for electrolytic refining 2.8%
See More Products 79.8%
58.1 bn USD of products imported in 2022
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 7.1%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 5.9%
Copper ores and concentratesCopper ores and concentrates 3.8%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 2.4%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 2.3%
See More Products 78.5%

Source: Comtrade, Latest Available Data

 
 

To go further, check out our service Import Export Flows.

 

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Sources of General Economic Information

Ministries
Ministry of Economy
Ministry of Finance
Statistical Office
National Statistical Institute
Central Bank
Bulgarian National Bank
Stock Exchange
Bulgarian Stock Exchange
Search Engines
Servers
Dir
Gyuvetch.bg
Search.bg
Economic Portals
Bulgaria business portal

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Political Outline

Current Political Leaders
President: Rumen RADEV (since 22 January 2017 - reelected in 2021)
Prime Minister: Nikolai DENKOV (since 6 June 2023)
Next Election Dates
Presidential: Autumn 2026
Parliamentary: 2027
Main Political Parties
Bulgaria has a multi-party system, where no single party generally has a chance of gaining power alone. Thus political parties work with each other to form coalition governments. The major political parties are:

- Citizens for European Development of Bulgaria (GERB): centre-right, it receives most of its support from nationalists and socialists
- Union of Democratic Forces (SDS): centre-right, conservative
- Movement for Rights & Freedoms (DPS): centrist, liberal, formed mainly by the Turkish ethnic minority
- Revival: far-right, ultranationalist
- Bulgarian Socialist Party (BSP): centre-left, socialist, draws its support from rural areas
- We Continue the Change (PP): centre, liberalism, pro-European
- Yes, Bulgaria!: centre, liberalism
- Democrats for a Strong Bulgaria (DSB): centre-right to right-wing, conservatism
- Green Movement (ZD): centre, green party
- Volt Bulgaria: centre-left
- There Is Such a People (ITN): right-wing, populist.

Type of State
Republic state based on parliamentary democracy working under a pluriform multi-party political system.
Executive Power
The President is the chief of the state and is directly elected for a 5-year term (renewable once), the same as for the Vice President. He is the commander-in-chief of the armed forces and nominates the Prime Minister, who is elected by the National Assembly. The Prime Minister, as Chairman of the Council of Ministers, holds the executive powers and is also the head of the government. Moreover, the Prime Minister nominates the Council of Ministers. The Council of Ministers is the principal body of the executive branch. The Council of Ministers must resign if the National Assembly passes a vote of no confidence.
Legislative Power
Bulgaria has a unicameral parliament (called the National Assembly), whose 240 members are elected for 4-year-terms by popular vote. A political party or coalition must obtain a minimum of 4% of the vote in order to enter the National Assembly. The parliament is responsible for the enactment of laws, approval of the budget, scheduling of presidential elections, selection and dismissal of the prime minister and other ministers, declaration of war, deployment of troops outside of Bulgaria, and ratification of international treaties and agreements.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
112/180
Evolution:
111/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
2/7
Civil Liberties:
46/60

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
The summary of the EU’s economic response to the COVID-19 pandemic is available on the website of the European Council.
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) in Bulgaria, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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Latest Update: March 2024