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After considerable growth rates between 2000 and 2008 - mostly above 6 percent – Bulgaria didn’t escape the global economic downturn in 2009 unscathed: The gross domestic product (GDP) fell by 5.5 percent. However, by 2010 a turnaround was being made at +0.2 percent which slowly but surely increased to around +2 percent in 2015. The gross domestic product of Bulgaria amounts to around 42 billion euros. The prospects are future growth are clouded by deflationary tendencies and the tremors through the crises experienced two of the country’s main banks in 2014.
Despite its economy’s resilient nature, Bulgaria is one of the poorest EU country with around 46 percent of its population living below the minimum GDP per capita figure observed among the EU member states.
The public infrastructure, particularly in the transport and healthcare, as well as in education and research is still underdeveloped. State corporations are over indebted (railway, energy sector, hospitals) and cannot be privatized. Additionally, the country is suffering from an acute population decline.
The recent economic data for 2015 (as of September), is as follows: gross domestic product growth rate: +2.2 percent, inflation: -0.3 percent (January-August), government gross debt: 29.1 percent of GDP, average wages: 450 euros, budget surplus: +1 percent, current account surplus: 1.6 per cent, foreign direct investment: 907 million euros (Jan-July), up 4.8 percent from Jan-July 2014, unemployment rate: 9.3 percent (August 2015), down from August 2014’s 10.4 percent). (National Statistics Institute of Bulgaria).
Major industries of the country are energy, food and beverage, metal products, mechanical engineering, mining, tourism, software development, pharmaceuticals and agriculture (especially cereals; meat production is very low).
Furthermore, Bulgaria is an important location for call centers and technical support via the Internet, and is slowly overtaking India as the call-center capital of the world. This can be seen in the statistics for the outsourcing industry in 2014 which grew by 19.5 percent percent, year-on-year. In 2015, it is predicted to grow by another 20 percent! (NSIB)
Why invest in Bulgaria?
- Despite several political change of powers in a short time in recent years Bulgaria has retained a favourable position in Global Competitiveness Ranking of the World Economic Forum (WEF). This is mostly attributed to the positive reforms in the export arena by subsequent government. This has allowed for the country’s IT, electrical engineering and mechanical engineering sectors and the automotive industry to flourish.
- Stringent economic reforms in recent years have allowed Bulgaria to have one of the lowest debt to GDP ratios in the European Union, at 29.1 percent. In addition, the country also boasts of the one of lowest budget deficits in the region, at a mere 1.5 percent. (2013 data)
- Bulgaria has the lowest corporate tax in the whole of European Union at a flat 10 percent. In addition, enterprises set up in high unemployment areas are exempt from this tax completely.
- Bulgaria’s unique location allows for five pan-European corridors to pass through the country. In addition, the country provides access to the growing Turkish market because of a shared border, as well as direct access to some of the richest countries of the Middle East through sea-links.