Operations - Bulgaria

Bulgaria, a growing economy

Classified as an “upper-middle-income economy” by the World Bank, Bulgaria is one of the fastest growing economies in Europe.

Since 1989, when the country began democratic reforms, Bulgaria has undergone major economic, political, and social transformation. Following the introduction of the Currency Board Arrangement in July 1997, macroeconomic stability and growth were restored and sustained with per capita incomes growing at close to 6% per year with substantial improvements in employment and investment.

Over the past several years, Bulgaria has made impressive progress towards long-term stability and sustained growth. As a result of sound macroeconomic policies and deep structural reforms, average output growth exceeded 6% per year from 2004 to 2008. A broad structural reform program contributed to this solid economic performance. Following a long period of underinvestment in the 1990s, growth is driven now by investment, which accounts for close to 38% of GDP.

Bulgaria became a member of the European Union in 2007 and has some of the most favourable taxes in the EU including 10% corporate income tax rate; 0% in high-unemployment areas; 10% flat tax rate on personal income; two year VAT exemption for imports of equipment for investment projects over € 5 million, depreciation of two years for computers and new manufacturing equipment; opportunity for R&D expenditure write-off and 5% withholding tax on dividends and liquidation quotas (0% for EU tax residents).



Source: Invest Bulgaria Agency



Source: Invest Bulgaria Agency


Institutions like the European Bank for Reconstruction and Development (EBRD) are investing in a considerable number of projects supporting private sector development in energy, telecommunications, banking, agriculture and general industry.

In April 2005, DPM announced the agreement with the EBRD for a $10 million loan facility towards its Chelopech redevelopment efforts and environmental rehabilitation programme, which was increased to $25 million in July 2008.

Source: Bulgarian National Bank, NSI, InvestBulgaria Agency

Source: Bulgarian National Bank, InvestBulgaria Agency, Bank AustriaCreditanstalt

Annual Inflation Rate & Forecast

Source: Eurostat