Bulgaria flag Bulgaria: Economic outline

Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The Covid-19 pandemic hit Bulgaria at a time when its economy was performing well. Before the sanitary crisis, a series of structural reforms, the highly successful integration of Bulgarian manufacturing firms into world production chains, and sound macroeconomic management had led to five years of growth rates above 3%, rapidly rising real wages and historically low unemployment. After falling into recession in 2020, the economy rebounded and grew an estimated 4.5% in 2021 (IMF), underpinned by robust private consumption and the recovery of goods exports. According to IMF's forecasts, growth is expected to reach 4.4% in 2022 before marginally slowing to 4% in 2023, also thanks to the EU Recovery and Resilience Facility grants (which should cumulate about 4.3% of 2019 GDP over the forecast horizon).

The country's public finances are relatively strong, with a low debt-to-GDP ratio. However, the effects of the Covid-19 crisis are clearly visible: the debt increased from a pre-pandemic level of 18.4% to 25% in 2021, and the government budget was negative by 2.3% of GDP in the same year, as the government extended the emergency support to households, businesses and the health sector. The deficit is forecast to remain stable in 2022 and decrease to 1.3% the following year as most measures are phased-out and revenues recover. On the other hand, the debt-to-GDP should rise further (to 26.1% and 26.7% this year and the next). Headline inflation reached 2.1% in 2021 on the back of high energy prices. The IMF expects the rate to float around 1.9% over the forecast horizon.

The unemployment rate was estimated at 5.2% in 2021, strongly influenced by the negative economic impact of the COVID-19 pandemic despite the job-retention schemes put in place by the government. The favourable economic outlook is set to tighten the labour market over the forecast horizon, hence unemployment should follow a downward trend (4.7% this year and 4.4% in 2023 – IMF). Overall, income inequality in Bulgaria is among the highest in the EU, and almost 35% of the population is at risk of poverty (the second-highest rate in the EU after Romania).

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 68.56e69.21e77.9184.3191.12
GDP (Constant Prices, Annual % Change) 3.7e-4.2e4.54.44.0
GDP per Capita (USD) 9,863e10,006e11,33212,33713,414
General Government Balance (in % of GDP) 0.8-1.8e-2.3-2.3-1.3
General Government Gross Debt (in % of GDP) 18.423.6e25.026.126.7
Inflation Rate (%) 2.51.2e2.811.03.3
Unemployment Rate (% of the Labour Force) 4.35.2e5.24.74.4
Current Account (billions USD) 1.26-0.460.400.29-0.21
Current Account (in % of GDP) 1.8-0.7e0.50.3-0.2

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Bulgarian Lev (BGN) - Average Annual Exchange Rate For 1 GBP 2.392.232.212.132.20

Source: World Bank, 2015

 

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Latest Update: September 2022

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