The Economy of Bulgaria

Bulgaria has an emerging market economy in the upper middle income range, where the private sector accounts for more than 80 per cent of GDP. From a largely agricultural country with a predominantly rural population in 1948, by the 1980s Bulgaria had transformed into an industrial economy with scientific and technological research at the top of its budgetary expenditure priorities.

Bulgarian GDP (PPP) per capita stood at 47 per cent of the EU average in 2012 according to Eurostat data, while the cost of living was 49 per cent of the average. The currency is the lev, which is pegged to the euro at a rate of 1.95583 levа for one euro. Bulgaria is not part of the Eurozone and has abandoned its plans to adopt the euro.

Economic indicators have worsened amid the late-2000s financial crisis. After several consecutive years of high growth, GDP contracted 5.5 per cent in 2009 and unemployment remains above 12 per cent. Industrial output declined 10 per cent, mining by 31 per cent, and ferrous and metal production marked a 60 per cent drop. Positive growth was restored in 2010.

Economic activities are fostered by the lowest personal and corporate income tax rates in the EU, and the second-lowest public debt of all member states at 16.5 per cent of GDP in 2012. In 2012, GDP (PPP) was estimated at $104 billion, with a per capita value of $14,235. Sofia and the surrounding area are the most developed region of the country with a per capita GDP (PPS) of $23162 in 2009. Bulgaria is a net receiver of funds from the EU. The absolute amount of received funds was 589 million euro in 2009.

The labor force is 2.45 million people, of whom 7.1 per cent are employed in agriculture, 35.2 per cent are employed in industry and 57.7 per cent are employed in the services sector. Extraction of metals and minerals, production of chemicals, machinery and vehicle components, petroleum refining and steel are among the major industrial activities. Mining and its related industries employ a total of 120 000 people and generate about five per cent of the country's GDP. Bulgaria is Europe's sixth-largest coal producer. Local deposits of coal, iron, copper and lead are vital for the manufacturing and energy sectors. Almost all top export items of Bulgaria are industrial commodities such as oil products, copper products and pharmaceuticals. Bulgaria is also a net exporter of agricultural and food products, of which two-thirds go to OECD countries. It is the largest global producer of perfumery essential oils such as lavender and rose oil. Agriculture has declined significantly in the past two decades. Production in 2008 amounted to only 66 per cent of that between 1999 and 2001, while cereal and vegetable yields have dropped by nearly 40 per cent since 1990. Of the services sector, 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. Lonely Planet ranked it among its top 10 destinations for 2011. Most of the visitors are British, Romanian, German and Russian. The capital Sofia, the medieval capital Veliko Tarnovo, coastal resorts Golden Sands and Sunny Beach and winter resorts Bansko, Pamporovo and Borovets are some of the locations most visited by tourists.

Bulgaria's strategic geographic location and well-developed energy sector make it a key European energy centre despite its lack of significant fossil fuel deposits. Nearly 34 per cent of its electricity is produced by the nuclear power station at Kozloduy and public opinion strongly supports nuclear energy development. The rapid expansion of alternative energy sources such as wind and solar power stations make Bulgaria one of the fastest-growing wind energy producers in the world. The country aims to produce 16 per cent of its electricity from renewable energy sources by 2020.

The national road network has a total length of 40,231 kilometers (24,998 mi), of which 39,587 kilometers (24,598 mi) are paved, but nearly half fall into the lowest international rating for paved roads. Railroads are a major mode of freight transportation, although highways carry a progressively larger share of freight. Bulgaria has 6,238 kilometers (3,876 mi) of railway track and currently a total of 81 km of high-speed lines are in operation. Rail links are available with Romania, Turkey, Greece, and Serbia, and express trains serve direct routes to Kiev, Minsk, Moscow and Saint Petersburg. Sofia and Plovdiv are the country's air travel hubs, while Varna and Burgas are the principal maritime trade ports. Varna is also scheduled to be the first station on EU territory to receive natural gas through the South Stream pipeline.