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

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

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. After falling into recession in 2020, the economy rebounded and grew an estimated 4.5% in 2021 (IMF), underpinned by robust private consumption and the recovery of goods exports. According to IMF's forecasts, growth is expected to reach 4.4% in 2022 before marginally slowing to 4% in 2023, also thanks to the EU Recovery and Resilience Facility grants (which should cumulate about 4.3% of 2019 GDP over the forecast horizon).

The country's public finances are relatively strong, with a low debt-to-GDP ratio. However, the effects of the Covid-19 crisis are clearly visible: the debt increased from a pre-pandemic level of 18.4% to 25% in 2021, and the government budget was negative by 2.3% of GDP in the same year, as the government extended the emergency support to households, businesses and the health sector. The deficit is forecast to remain stable in 2022 and decrease to 1.3% the following year as most measures are phased-out and revenues recover. On the other hand, the debt-to-GDP should rise further (to 26.1% and 26.7% this year and the next). Headline inflation reached 2.1% in 2021 on the back of high energy prices. The IMF expects the rate to float around 1.9% over the forecast horizon.

The unemployment rate was estimated at 5.2% in 2021, strongly influenced by the negative economic impact of the COVID-19 pandemic despite the job-retention schemes put in place by the government. The favourable economic outlook is set to tighten the labour market over the forecast horizon, hence unemployment should follow a downward trend (4.7% this year and 4.4% in 2023 – IMF). Overall, income inequality in Bulgaria is among the highest in the EU, and almost 35% of the population is at risk of poverty (the second-highest rate in the EU after Romania).

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 68.5669.21e77.9184.3191.12
GDP (Constant Prices, Annual % Change) 3.7e-4.24.54.44.0
GDP per Capita (USD) 9,863e10,00611,33212,33713,414
General Government Balance (in % of GDP) 0.8-1.8e-2.3-2.3-1.3
General Government Gross Debt (in % of GDP) 18.423.6e25.026.126.7
Inflation Rate (%) 2.51.2e2.11.91.9
Unemployment Rate (% of the Labour Force) 4.35.2e5.24.74.4
Current Account (billions USD) 1.26-0.460.400.29-0.21
Current Account (in % of GDP) 1.8-0.70.50.3-0.2

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Main Sectors of Industry

Traditionally an agricultural country, Bulgaria is now considerably industrialised. In fact, the agricultural sector only accounts for 3.4% of GDP and employs 6.6% 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. According to preliminary NSI data, in 2021 the gross output of the agricultural sector stood at BGN 10.2 billion, with cereals and oilseeds having a share of about 60% (+61% and +54% year-on-year, respectively).

The industry represents 23% 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 60.2% of the GDP and employing 63.4% of the workforce. Tourism is one of the fastest-growing sectors (contributing 3.1% of GDP before the pandemic). According to the latest figures from the European Banking Federation, there are 24 banks operating in Bulgaria, six of which are foreign bank branches. The top five banks held approximately 66.6% of all assets; with domestic banks holding a market share of 22.4% against 71.5% of EU subsidiaries.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 6.6 30.0 63.4
Value Added (in % of GDP) 3.4 23.0 60.2
Value Added (Annual % Change) -5.3 -4.6 -4.0

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 110.6% of GDP (World Bank, latest data available). Bulgaria mainly exports refined and unrefined copper, petroleum oils, medicaments and wheat; while imports are led by copper ores, petroleum oils, medicaments, motor cars and telephones.

The country’s main trading partners in 2020 were Germany (16%), Romania (9.1%), Italy (6.9%), Greece (6.6%), and Turkey (6.4%); whereas imports came chiefly from Germany (12.1%), Romania (7.3%), Turkey (7.1%) Italy (7.1%), and Russia (6.1%).

According to the latest figures from WTO, in 2020 exports of goods declined by 4.3%, at USD 31.9 billion, with imports decreasing at a faster pace (-6.9%), totalling USD 35 billion. The country has a structural trade deficit; however, it is a net service exporter: the country exported USD 8.1 billion worth of services, importing only USD 4.7 billion in 2020. The World Bank estimates that in the same year Bulgaria’s trade balance was positive by 1.47% of GDP. Preliminary data by the National Statistical Institute show that in the first eleven months of 2021 the total value of exported goods amounted to BGN 61,992.4 million, which is 23.3% more than the same period of the previous year, while the total value of imported goods added up to BGN 69,356.5 million and grew by 26.3%.

 
Foreign Trade Indicators 20162017201820192020
Imports of Goods (million USD) 28,84634,18437,85637,66335,038
Exports of Goods (million USD) 25,97831,43833,61733,34031,907
Imports of Services (million USD) 4,5305,6885,9685,9474,735
Exports of Services (million USD) 8,4528,80210,83811,4028,116
Imports of Goods and Services (Annual % Change) 5.27.45.75.2-6.6
Exports of Goods and Services (Annual % Change) 8.65.81.73.9-11.3
Imports of Goods and Services (in % of GDP) 59.162.963.361.054.4
Exports of Goods and Services (in % of GDP) 64.067.365.864.256.1
Trade Balance (million USD) -1,095-867-3,201-3,256-2,175
Trade Balance (Including Service) (million USD) 2,5652,6091,6122,1991,198
Foreign Trade (in % of GDP) 123.1130.2129.1125.2110.6

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

 

Main Partner Countries

Main Customers
(% of Exports)
2020
Germany 16.0%
Romania 9.1%
Italy 6.9%
Greece 6.6%
Turkey 6.4%
See More Countries 54.9%
Main Suppliers
(% of Imports)
2020
Germany 12.1%
Romania 7.3%
Turkey 7.1%
Italy 7.1%
Russia 6.1%
See More Countries 60.3%

Source: Comtrade, Latest Available Data

 
 

Main Products

31.9 bn USD of products exported in 2020
Copper, refined, and copper alloys, unwrought ...Copper, refined, and copper alloys, unwrought (excl. copper alloys of heading 7405) 3.7%
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 3.5%
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) 3.3%
Copper, unrefined; copper anodes for electrolytic...Copper, unrefined; copper anodes for electrolytic refining 3.1%
Wheat and meslinWheat and meslin 2.2%
See More Products 84.2%
35.0 bn USD of products imported in 2020
Copper ores and concentratesCopper ores and concentrates 4.8%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 4.2%
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) 3.8%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 2.4%
Electrical apparatus for line telephony or line...Electrical apparatus for line telephony or line telegraphy, incl. line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof 1.9%
See More Products 82.9%

Source: Comtrade, Latest Available Data

 
 

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

 
 

Main Services

Source: United Nations Statistics Division, Latest Available Data

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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)
Prime Minister: Kiril PETKOV (since 13 December 2021)
Next Election Dates
Presidential: autumn 2021
Parliamentary: 2025
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:

- There Is Such a People: populist, social conservatism, was the first party in the latest elections
- Citizens for European Development of Bulgaria (GERB): centre-right, receives most of its support from nationalists and socialists
- Bulgarian Socialist Party (BSP): centre-left, socialist, draws its support from rural areas
- Democratic Bulgaria: centre to centre-right, liberal
- Movement for Rights & Freedoms (DPS): centrist, liberal, formed mainly by the Turkish ethnic minority
- Stand Up! Mafia, Get Out!: anti-corruption coalition of political parties (Stand Up.BG, The Poisonous Trio (Otrovnoto trio), Movement 21 (D21), the Bulgaria for Citizens Movement (DBG), the United People's Party and the Agrarian People's Union (ZNS))

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), 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 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 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

Source: World Press Freedom Index, Reporters Without Borders

 

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

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Bulgaria, please visit the website of the Ministry of Health. The national portal Coronavirus.bg provides daily updates on the pandemic.
For the international outlook you can consult the latest
situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

To find out about the latest public health situation in Bulgaria and the current sanitary measures in vigour, please consult the dedicated page on the national portal Coronavirus.bg, including the up-to-date information on the containment measures put in place. Further public health recommendations can be found on the website of the Ministry of Health (in Bulgarian).
The order of the Ministry of Health introducing anti-epidemic measures in the country can be consulted here (in Bulgarian).

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the portal of the Bulgarian National Customs Agency.
The Bulgarian government banned the extra-UE export of protective medical equipment and of quinine-based drugs.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Bulgaria on the
International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

To know about the measures taken by the Bulgarian government to address the impact of the COVID-19 pandemic on the national economy, please visit the official national portal Coronavirus.bg's pages dedicated to the economic and social measures (in Bulgarian). The website of the Ministry of Economy provides a list of the decisions taken by the relevant national authorities. The act on the measures and actions during the state of emergency can be accessed here.
For an overview in English of all the measures, consult the guide by Deloitte.
The information on the EU’s economic response to COVID-19 and the actions to minimise the fallout on the EU member states’ economies of the COVID-19 outbreak is available on the website of
the European Council.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Bulgarian government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Bulgaria in the
IMF’s Policy Tracker platform.

Support plan for businesses
For the information on the local business support scheme and taxation measures established by the Bulgarian government to help businesses to deal with the economic impacts of the COVID-19 epidemic on their activity, please consult the official national portal Coronavirus.bg (in Bulgarian). The website of the Ministry of Economy provides a list of the decisions taken by the relevant national authorities.
Further information can be found on the guide by Deloitte.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

At the moment the official government sources do not provide any information on the specific programs for Bulgarian exporting companies put in place by the national government following the COVID-19 epidemic outbreak. For updated information please consult the website of the Ministry of Finance.
The European Commission adopted a Temporary Framework for State aid measures to support the economy in the COVID-19 outbreak, which enables short-term export credit insurance to be provided by the State where needed.

 

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