Home > Economy of Bulgaria
Bulgaria's economy contracted dramatically after 1989 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%, only to regain pre- 1989 levels in June of 2004. In addition, UN sanctions against Serbia (1992-95) and Iraq took a heavy toll on the Bulgarian economy. 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 go-slow, mismanaged economic reforms, its disastrous agricultural policyAn agricultural policy or agricultural subsidy is an incentive to engage in a particular form of agriculture. It often takes the form of tax reductions, favorable deals on equipment, and so on. Subsidies status Currently, economic studies place the averag, and an unstable and decapitalized banking system, which led to inflation of 311% and the collapse of the lev1951 Bulgaria 10 levs bill. 1951 Bulgaria 10 levs bill. The Lev (lv) ( Bulgarian: is the currency of Bulgaria, and it has been used since 1881. Its smaller unit is called stotinka (plural stotinki , and 100 stotinki are of the same value as one lev. In th. When pro-reform forces come into power in spring 19971997 was a common year starting on Wednesday (see link for calendar), and was designated the International Year of the Reef''. Events January January 3 NBC's Today Show Bryant Gumbel signs off for the last time January 8 Mister Rogers receives a star on t, an ambitious economic reform package, including introduction of a currency board regime, was agreed with the IMF and the World BankThe International Bank for Reconstruction and Development (IBRD, in Romance languages BIRD), better known as the World Bank is an international organization created to fight poverty by means of financing states. Its operation is maintained through payment, and the economy began to stabilize.Since 1990Events January January 3 Former leader of Panama Manuel Noriega surrenders to American forces. January 7 The Leaning Tower of Pisa is closed to the public due to safety concerns. January 9 Lt Gen Bazilio Olara Okello The man who led the coup aginst Dr Apo, the bulk of Bulgarian trade has shifted from former COMECON countries primarily to the European UnionFor other uses, see EU (disambiguation). The European Union or EU is a supranational organisation of 25 European states. It was established with that name by the Treaty on European Union (commonly known as the Maastricht Treaty) in 1992 but many aspects o, although RussiaThe Russian Federation ( Russian: , transliteration: Rossiyskaya Federatsiya or Rossijskaja Federacija , or Russia (Russian: , transliteration: Rossiya or Rossija , is a country that stretches over a vast expanse of eastern Europe and northern Asia. Withn oil exports to Bulgaria make it Bulgaria's largest single trading partner. In December 1996, Bulgaria joined the World Trade Organization. Bulgaria's slow pace of cash privatization, contradictory government tax and investment policies, and bureaucratic red tape have kept foreign investment among the lowest in the region. Total direct foreign investment from 1991 through 1996 was $831 million. Germany was the largest investor.
The BSP 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 will be used to develop financial markets, improve social safety net programs, strengthen the tax system, reform agricultural and energy sectors, and further liberalize trade.
Economy - overview:
In April 1997, the current ruling 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 consumer price increase of 6.2% in 1999. Following declines in GDP in both 1996 and 1997, the economy grew an officially estimated 3.5% in 1998 and 2.5% in 1999. In September 1998, the IMF approved a three-year Extended Fund Facility , which provides credits worth approximately $900 million, designed to support Bulgaria's reform efforts. In 1999, an unfavorable international environment - primarily caused by the Kosovo conflict - and structural reforms slowed 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.
