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Bulharsko

One of the three newest EU members
A Balkan country with spectacular mountains and the Black Sea coastline

Total area: 111, 000 sq km (roughly the size of Tennessee)
Population:  6.9 million
Government type: Parliamentary democracy
Administrative division: 28 provinces
Capital + other major cities: Sofia (1.2 million) + Plovdiv (341,000), Varna (335,000), Burgas (201,000), Ruse (152,000)
Currency: lev (BGL)
Languages: Bulgarian 76.8% (official), Turkish 8.2%, Roma 3.8%, other 0.7%, undeclared 10.5%
Ethnicity: Bulgarian 76.9%, Turkish 8%, Roma 4.4%, other 0.7% (including Russian, Armenian, and Vlach), other (unknown) 10%
Religion: Eastern Orthodox 59.4%, Muslim 7.8.%, other (including Catholic, Protestant, Armenian Apostolic Orthodox, and Jewish) 1.7%, none 3.7%, undeclared 27.4%
President: (Mr.) Ruden RADEV (since 22 January 2017)
Prime Minister: (Mr.) Kiril PETKOV (since 13 December 2021)
Date of EU accession: 1 January 2007

KEY FEATURES

  • Great potential of tourism sector (coast of Black Sea, mountains)
  • High share of agricultural sector and strong food industry – dairy, wine
  • Biggest power exporter in the Balkan region
  • EU’s poorest country
  • Low labor costs, low corporate (10%) and income taxes (10%)
  • The third least tax burdened country in the EU
  • A long fight with corruption still ahead
  • Uses Cyrillic

MACROECONOMIC OVERVIEW

Bulgaria’s GDP per capita in PPP is still only about a half of the EU-27 average (55%), the lowest rate among all Member States. However, Bulgaria ranks 61th in the Ease of Doing Business rank list, higher than most other Eastern European states, and 32th in the Economic Freedom of the World index, outperforming Belgium, Italy, Poland, France, Hungary, and Portugal. It also introduced a set of tax laws aimed at supporting local businesses as well as attracting FDI. Bulgaria also has one of the lowest public debts in the EU.

Despite having the lowest GDP per capita in the EU, Bulgaria has good potential for further growth. It has undergone a significant transformation since the 1990s but still faces challenges in the form of institutional and governance weaknesses and negative demographic trends. In recent years, the economy has grown steadily above the EU average. After a contraction in 2020, the economy grew by 4.4% in 2021 with exports and consumption acting as the main drivers.

The Bulgarian currency has been firmly pegged to the EUR, which provides good stability and eliminates risk in the trade. Since mid-2020, the country participates in the European exchange rate mechanism, which is one of the initial steps to adopting the euro as the official currency.

Selected economic indicators, Bulgaria, 2015 - 2021

    2015 2016 2017 2018 2019 2020 2021
GDP
 
 
 
 
 
 
 
 
Real GDP growth
%
3.4
3.0
2.8
2.7
4.0
-4.4
4.4
GDP at current prices
€ bn
45.68
48.62
52.31
56.01
60.68
61.33
67.87 (p)
Foreign trade
 
 
 
 
 
 
 
 
Exports
€ bn
29.23
31.15
35.21
36.94
38.57
33.93
42.78 (p)
Imports
€ bn
28.79
28.74
32.94
35.49
36.50
33.03
42.05 (p)
Balance
€ bn
0.44
2.41
2.27
1.45
2.07
0.9
0.73
Prices
 
 
 
 
 
 
 
 
CPI – average inflation rate
%
-1.1
-1.3
1.2
2.6
2.5
1.2
2.8
PPI – industry – average
%
-2
-3.1
5.0
3.9
3.1
   -1.9
15.3
Employment
 
 
 
 
 
 
 
 
Registered unemployment
%
10.1
8.6
7.2
6.2
5.2
6.1
5.3
Average monthly gross wage
457
 
406
586
690
710
 
Exchange rates
 
 
 
 
 
 
 
 
BGN/USD average
 
1.7635
1.769
1.735
1.659
1.748
1.716
1.654
Currency board fixed rate: BGN/EUR
 
1.9557
1.956
1.956
1.956
1.956 1.956 1.956

Source: Bulgarian National statistical institute, IMF, OECD, Eurostat, ECB, 2015-2021

KEY SECTORS

The relative share of each economic sector in the GVA (Gross Value Added) is 69.5% in the services sector, 26.5% in industry, and 4% in agriculture. Tourism has seen a steady growth of 5-12% over the last 16 years (wellness & spa and historical tourism growing, ski resorts start-ups mushrooming).

 The country has a strong metallurgical industry, which represents 20% of the country’s exports. Mining and its related industries employ a total of 120,000 people and generate about 5% of the country’s GDP. Bulgaria is the fourth largest coal producer in the EU. Local deposits of coal, iron, copper, and lead are vital for the manufacturing and energy sectors. Extraction of metals and minerals, petroleum refining, and steel are among the major industrial activities. Almost all top export items of Bulgaria are industrial commodities such as oil products, copper products, and pharmaceuticals/chemicals. Bulgaria is also an important power producer and exporter in the region. It is the largest global producer of perfume essential oils such as lavender and rose oil.

Within the manufacturing sector, food processing is the major segment known especially for its dairy products and wine which is exported mostly to the EU (and before the war to Russia). Other important sub-sectors include textiles (close ties with European manufacturers and foreign companies), engineering (supplies of components to foreign OEMs), and electrical engineering/electronics (mainly automotive components). However, the production with low added value still prevails within the local industry.

Among the service sectors, tourism is the most significant contributor to economic growth. In recent years, Bulgaria has emerged as a travelling destination with its inexpensive resorts and beaches outside the reach of the tourist industry. Most of the visitors are British, Romanians, Germans, and formerly also Russians. Sunny coasts and winter resorts Bansko, Pamporovo and Borovets are among the most visited tourist locations.

EXPORTS & IMPORTS

Exports make a strong contribution to GDP. Bulgaria is quite proactive in foreign trade, with export/GDP ratio of 63% in 2021. The key exported commodities are electrical machinery, copper, mineral fuels including oil, cereals, vehicles, pharmaceuticals, articles of iron and steel, plastics and plastic articles, and clothing and accessories. Due to its geographical location and business relations based on historical development, its intra-trade with EU countries is at a lower level. Important import partners outside EU are Turkey and Russia (before the war in Ukraine).

2020 export and import data:

Main import partners:
Germany – 12.1%
Romania – 7.3%
Turkey – 7.1%
Italy – 7.1%
Russian Federation – 6.1%

Main export partners:
Germany – 16%
Romania – 9.1%
Italy – 6.9%
Greece – 6.6%
Turkey – 6.4%
France – 3.8%

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Chart by Visualizer

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