Bulgària flag Bulgària: Visió econòmica i política

El context econòmic de Bulgària

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, October 2021

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. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 

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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

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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
Economic Portals
Bulgaria business portal
 

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Actualitzacions: April 2024

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