The Economy of Bulgaria

Bulgaria has a free market economy and the World Bank classifies it as an upper-middle-income nation with a GDP (PPP) of approximately $93.8 billion, GDP per capita of $12,372 as of October 2008. In 2006, the country’s GDP is made up of roughly 65.9% services, 26.1% industry, and 8.0% agriculture. Several multinational companies have established regional headquarters in Bulgaria such as HP that built up its European Global Service Centre, and the Middle East and Africa (EMEA) in Sofia.

Some of the Bulgaria’s major trading partners include Germany, Italy, Turkey, Russia, Greece, Belgium, France, Romania, and the US. Its main products are electricity production, gas and water, machinery and equipment, chemicals, base metals, refine petroleum, and nuclear fuel. In the 1990s the economy of Bulgaria crumbled radically when the COMECON (Council for Mutual Economic Assistance) system fall apart. The loss of the Soviet market, to which the Bulgarian economy had been strongly dependent, also worsened the economy. Growth rate was experienced again in the late 1990s. As of January 2008, the income tax for all Bulgarians is a flat rate of 10% - the lowest in the European Union, and one of the lowest in the world.

January 1 of 2007 marked a historical event to Bulgaria’s history. It was when the country joined the European Union which contributed several direct trade liberalization. Despite the country’s improving economy, it still remains the 2nd poorest member state of the European Union. Bulgaria is expected to join the Eurozone between 2010 and 2012.