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
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 4.2% in 2021 and 3.9% in 2022, supported by robust growth in exports and by wage and social transfer increases partly compensated for increasing consumer prices. Increased EU funds absorption, notably of the Recovery and Resilience Facility, should support aggregate investment in both 2023 and 2024 when the economy is forecast to grow by 3% and 4.1%, respectively (IMF).
The country's public finances are relatively strong, with a low debt-to-GDP ratio, estimated at 22.8% in 2022. Nevertheless, the IMF expects the ratio to grow over the forecast horizon, to 25.2% this year and 26.9% in 2024. The government budget recorded a deficit of BGN 1.5 billion, around 1% of GDP in 2022 as per the latest government figures, with a forecast of 1.9% and 1.4% this year and the next respectively, according to the IMF. Energy and food prices fuelled inflation, which reached 13% in 2022 (EU Commission). Overall, HICP inflation is set to decline to 5.2% in 2023 on account of lower energy prices, before decelerating further the following year (2.2% - IMF).
The unemployment rate was estimated at 5.1% in 2022 when wage and social transfer increases compensated for rising consumer prices. In 2023, wages are expected to continue to grow firmly and underpin household consumption, while the unemployment rate is forecasted to decrease to 4.7%. Bulgaria is classified as an upper-middle income country, with a GDP per capita (PPP) estimated at USD 29,178 in 2022 by the IMF, compared to an EU average of USD 53,960. Nevertheless, income inequality in Bulgaria is among the highest in the EU, and almost 31.7% of the population is at risk of poverty (the second-highest rate in the EU after Romania).
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
|---|---|---|---|---|---|
| GDP (billions USD) | 70.35 | 84.12 | 89.12 | 100.64 | 105.92 |
| GDP (Constant Prices, Annual % Change) | -4.0 | 7.6 | 3.4 | 1.4 | 3.5 |
| GDP per Capita (USD) | 10,171 | 12,300 | 13,109 | 14,893 | 15,770 |
| General Government Balance (in % of GDP) | -2.3 | -3.7 | -1.2 | -3.2 | -3.1 |
| General Government Gross Debt (in % of GDP) | 23.2 | 22.8 | 21.8 | 21.1 | 22.9 |
| Inflation Rate (%) | 1.2 | 2.8 | 13.0 | 7.5 | 2.2 |
| Unemployment Rate (% of the Labour Force) | 5.2 | 5.3 | 4.3 | 4.6 | 4.4 |
| Current Account (billions USD) | 0.03 | -1.56 | -0.61 | -0.49 | -1.07 |
| Current Account (in % of GDP) | 0.0 | -1.9 | -0.7 | -0.5 | -1.0 |
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
Traditionally an agricultural country, Bulgaria is now considerably industrialised. In fact, the agricultural sector only accounts for 4.4% of GDP and employs 7% of the workforce (World Bank, latest data available). The main crops are sunflower, tobacco and wheat. Around 46.5% 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 2022 stood at BGN 12,903.2 million, which was 19.7% higher than in the previous year. The increase was due to the rise in prices by 29.7%, while volumes decreased by 8.7%.
The industry represents 20.8% 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 62.3% of the GDP and employing around 63% 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 2022 when Bulgaria welcomed 11 million tourists, 27% more than the previous year. 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) | 6.6 | 30.0 | 63.4 |
| Value Added (in % of GDP) | 4.4 | 20.8 | 62.3 |
| Value Added (Annual % Change) | 28.8 | 1.7 | 9.9 |
Source: World Bank - Latest available data.
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| Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|
| Bulgarian Lev (BGN) - Average Annual Exchange Rate For 1 MUR | 0.05 | 0.05 | 0.05 | 0.05 | 0.04 |
Source: World Bank - Latest available data.
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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.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
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.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
See the country risk analysis provided by Coface.
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 121% of its GDP (World Bank, latest data available). Bulgaria mainly exports mineral fuel, lubricants and related materials (21.7%), manufactured goods classified chiefly by material (16%), machinery and transport equipment (15.6%), and food and live animals (13,8%); while imports are led by mineral fuel, lubricants and related materials (28.9%), manufactured goods classified chiefly by material (17.4%), machinery and transport equipment (17.3%), and crude materials except for fuel (15.5% - data NSI 2022).
According to preliminary figures by the National Statistical Institute, Bulgaria’s main export destinations in 2022 (Jan-Nov) were Germany (14.2%), Romania (10.1%), Italy (7.5%), Greece (6.4%), and Turkey (5.8%); whereas imports came chiefly from Russia (11.7%), Germany (10.7%), Turkey (8.4%), Romania (6.9%), Greece (6%), Italy and Russia (5.8% each).
According to the latest figures from WTO, in 2021 exports of goods rose by 28.5%, at USD 41 billion, with imports increasing at a faster pace (+31.8%), totalling USD 46.1 billion. The country has a structural trade deficit; however, it is a net service exporter: it exported USD 10.9 billion worth of services, importing only USD 5.6 billion in 2021. The World Bank estimates that in the same year, Bulgaria’s trade balance was positive by 1.7% of GDP. Preliminary data by the National Statistical Institute show that in the first eleven months of 2022, the total value of exported goods amounted to BGN 87.4 billion, which is 40.2% more than the same period of the previous year, while the total value of imported goods added up to BGN 99.9 billion and grew by 44.1%.
| Foreign Trade Indicators | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|
| Imports of Goods (million USD) | 34,184 | 37,856 | 37,663 | 35,038 | 46,195 |
| Exports of Goods (million USD) | 31,438 | 33,617 | 33,340 | 31,907 | 41,018 |
| Imports of Services (million USD) | 5,688 | 5,968 | 5,947 | 4,735 | 5,656 |
| Exports of Services (million USD) | 8,802 | 10,838 | 11,402 | 8,116 | 10,971 |
| Imports of Goods and Services (Annual % Change) | 7.4 | 5.8 | 5.2 | -4.3 | 10.9 |
| Exports of Goods and Services (Annual % Change) | 5.8 | 1.7 | 4.0 | -10.4 | 11.0 |
| Imports of Goods and Services (in % of GDP) | 62.7 | 63.2 | 60.7 | 54.2 | 59.6 |
| Exports of Goods and Services (in % of GDP) | 67.0 | 65.7 | 63.9 | 56.1 | 61.3 |
| Trade Balance (million USD) | -867 | -3,201 | -3,256 | -2,256 | -3,379 |
| Trade Balance (Including Service) (million USD) | 2,609 | 1,612 | 2,199 | 1,344 | 1,446 |
| Foreign Trade (in % of GDP) | 129.7 | 128.9 | 124.6 | 110.3 | 121.0 |
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
| Main Customers (% of Exports) |
2021 |
|---|---|
| Germany | 14.8% |
| Romania | 10.0% |
| Italy | 7.5% |
| Greece | 6.9% |
| Türkiye | 6.1% |
| See More Countries | 54.6% |
| Main Suppliers (% of Imports) |
2021 |
|---|---|
| Germany | 12.2% |
| Türkiye | 7.8% |
| Russia | 7.6% |
| Romania | 7.5% |
| Italy | 6.6% |
| See More Countries | 58.2% |
Source: Comtrade, Latest Available Data
Source: Comtrade, Latest Available Data
To go further, check out our service Import Export Flows.
Source: United Nations Statistics Division, Latest Available Data
- 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
- We Continue the Change (PP): centre, liberalism, pro-European
- 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
- Democratic Bulgaria: centre to centre-right, liberal
- Bulgaria Rise (BV): national conservatism.
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.).
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.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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.
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).
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.
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.
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.
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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Latest Update: May 2023
