Economy of Bulgaria

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Economy of Bulgaria
Currency	1 Lev (BGN) = 100 stotinki
Fiscal year	Calendar year
Statistics
GDP ranking	[1]
GDP	$77.13 billion (2006 est.)
GDP growth	6.5% (2006 est.)
GDP per capita	$10,400 (2006 est.)
GDP by sector	agriculture (13.6%), industry (32.1%), services (54.3%) (2006 est.)
Inflation	6.5% (2006 est.)
Pop below poverty line	14.1% (2003)
Labour force	3.45 million (2006 est.)
Labour force by occupation	agriculture 11%, industry 32.7%, services 56.3% (3rd quarter 2004)
Unemployment	9.6% (2006)
Main industries	electricity, gas and water; food, beverages and tobacco; machinery and equipment, base metals, chemical products, coke, refined petroleum, nuclear fuel
Trading Partners
Exports	$14.6 billion (2006)
Main Partners	Italy 13%, Germany 11%, Turkey 10.1%, Greece 6.1%, Belgium 5.6%, France 4.2%, US 4.1% (2005)
Imports	$20.69 billion (2006)
Main Partners	Germany 14.7%, Russia 9.9%, Italy 9.9%, Turkey 6.8%, Greece 6.4%, France 4% (2005)
Public finances
Public debt	24.8% of GDP (2006)^[1]
External public debt	$5.48 billion (November 2006)^[2]
Revenues	$13.28 billion (2006 est.)
Expenses	$12.16 billion, including capital expenditures of NA (2006 est.)
Economic aid	$475 million (2004-06)
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The economy of Bulgaria declined dramatically during the 1990s with the collapse of the COMECON system and the loss of the Soviet market, to which the Bulgarian economy had been closely tied. The standard of living fell by about 40%, and only regained pre-1989 levels by June of 2004. In addition, UN sanctions against Serbia (1992-95) and Iraq took a heavy toll on the Bulgarian economy. The first signs of recovery emerged when GDP grew 1.4% in 1994 for the first time since 1988, and 2.5% in 1995. Inflation, which surged in 1994 to 122%, fell to 32.9% in 1995. During 1996, however, the economy collapsed due to the BSP's, slow and mismanaged economic reforms, its disastrous agricultural policy, and an unstable and decentralized banking system, which led to an inflation rate of 311% and the collapse of the lev. When pro-reform forces came into power in the spring 1997, an ambitious economic reform package, including introduction of a currency board regime, was agreed to with the IMF and the World Bank, and the economy began to stabilize. As of 2006 the economy is growing at a steady pace of around 5% a year with inflation well under control. Future prospects are tied to the country's increasingly important integration with the European Union member states.

1 External trade & Investment
2 Economic reforms of the 1990s and early 2000s
3 Rebound from the February 1997 crisis
4 Statistics
5 See also
6 Notes

[edit] External trade & Investment

Since 1990, the bulk of Bulgarian trade has shifted from former COMECON countries primarily to the European Union, although Russian petroleum exports to Bulgaria make it Bulgaria's single largest trading partner. In December 1996, Bulgaria joined the World Trade Organization. In the early 90's Bulgaria's slow pace of privatization, contradictory government tax and investment policies, and bureaucratic red tape kept foreign investment among the lowest in the region. Total direct foreign investment from 1991 through 1996 was $831 million. In the years since 1997, however, Bulgaria has begun to attract substantial foreign investment. In 2004 alone over 2.72 billion Euro (3.47 billion US dollars) were invested by foreign companies. In 2005 economists observed a slowdown to about 1.8 billion euros (2.3 billion US dollars) in FDI which is attributed mainly to the end of the privatization of the major state owned companies.

[edit] Economic reforms of the 1990s and early 2000s

Members of the government promised to move forward on cash and mass privatization upon taking office in January 1995 but was slow to act. The first round of mass privatization finally began in January 1996, and auctions began toward the end of that year. The second and third rounds were conducted in Spring 1997 under a new government. In July 1998, the UDF-led government and the IMF reached agreement on a 3-year loan worth about $800 million, which replaced the 14-month stand-by agreement that expired in June 1998. The loan was used to develop financial markets, improve social safety net programs, strengthen the tax system, reform agricultural and energy sectors, and further liberalize trade. The European Commission, in its 2002 country report, recognized Bulgaria as a functioning market economy, acknowledging the progress made by Prime Minister Simeon-Saxenoburgotski's government toward market-oriented reforms..

[edit] Rebound from the February 1997 crisis

Agriculture and industry in Burgas Province — fields near Lake Vaya and the Neftochim Burgas oil refinery on the opposite shore

In April 1997, the Union of Democratic Forces (UDF) government won pre-term parliamentary elections and introduced an IMF currency board system which succeeded in stabilizing the economy. The triple digit inflation of 1996 and 1997 has given way to an official economic growth, but forecasters are predicting accelerated growth over the next several years. The government's structural reform program includes: (a) privatization and, where appropriate, liquidation of state-owned enterprises (SOEs); (b) liberalization of agricultural policies, including creating conditions for the development of a land market; (c) reform of the country's social insurance programs; and (d) reforms to strengthen contract enforcement and fight crime and corruption.

[edit] Statistics

Household income or consumption by percentage share:

lowest 10%: 5.6%
highest 10%: 22.8% (1997)

Distribution of family income - Gini index: 26.4% (2001)

Industrial production growth rate: 7% (2005 est.)

Electricity:

production: 38.07 TWh (2003)
consumption: 31.75 TWh (2003)
exports: 5.449 TWh (2003)
imports: 1.8 TWh (2003)

Electricity - production by source:

fossil fuel: 47.8%
hydro: 8.1%
nuclear: 44.1%
other: 0% (2001)

Oil:

production: 2,908 bbl/day (2003)
consumption: 107,000 bbl/day (2003 est.)
exports: NA (2001)
imports: NA (2001)
proved reserves: 8.1 million bbl (1 January 2002)

Natural gas:

production: 4 million cu m (2001 est.)
consumption: 5.804 billion cu m (2001 est.)
exports: 0 cu m (2001 est.)
imports: 5.8 billion cu m (2001 est.)
proved reserves: 3.724 billion cu m (1 January 2002)

Agriculture - products: vegetables, fruits, tobacco, livestock, wine, wheat, barley, sunflowers, sugar beets

Current account balance: $-2.741 billion (2005 est.)

Reserves of foreign exchange & gold: $9.707 billion (2005 est.)

Exchange rates: leva per US dollar - 1.66 (2004), 1.7327 (2003), 2.077 (2002), 2.1847 (2001), 2.1233 (2000) on 5 July 1999 the lev was re-denominated; the post-5 July 1999 lev is equal to 1,000 of the pre-5 July 1999 leva