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Economic and Political Development of Bulgaria International Open Seminar, VUZF University 30/11/2012 1989 • November 10, 1989- the beginning of modern democratic reforms in the country- The „Transition„ • March 1990 – Andrei Lukanov announces moratorium on external debt payment 1989-1995 • The Economic crisis strongly affected the country • Corruption is a major issue 1989 1995 2,450 USD 1,554 USD GDP growth rate -3% 2.9 % Inflation rate 6% 62.1 % Unemploym ent rate - 15.7% Minimum wage - - FDI inflow - 90.4 m. USD GDP per capita Source: NSI 1995- 2000 • February, 1996- The Hyperinflation cripples the country; Bulgaria experienced hyperinflation after a socialist party was elected in 1994 • January, 1997- Mass street protests against the Government, Parliament is attacked and strikes continue until February 4th, 1997 • February 12th, 1997- Stefan Sofiyanski manages a Caretaker Government • July 1st, 1997- Bulgaria implemented a currency board exchange regime that has restored macroeconomic stability 2000- 2005 • After the 1996 crisis the economy took the path of recovery • March, 29th 2004 – Bulgaria joined NATO • April, 25th 2005 – Bulgarian government signed the European Union Treaty of Accession • January, 1st 2007 – Bulgaria became a full member of the European Union 2005-2008 • Sustainable economic development (6 % average growth rate) • Increase in the construction, real estate and finance industries • The decrease of the unemployment rate lead to an increase of the household’s purchase power 2005 2008 3 733 usd 6 798 usd GDP growth rate 6,4% 6,2% Inflation rate 5,0% 12,3% Unemployment rate 10,1% 5,6% Minimum wage BGN 150 BGN 220 4.3 b. EUR 10 b. EUR GDP per capita FDI inflow Source: NSI 2009-2011 • The impact of the global financial crisis slowed down economic growth • Slow absorption of EU funding • FDI are declining due to the unfavorable global economic environment • However, innovation potential of the Bulgarian economy may bring back economic growth 2009 2011 6 403 usd 7 158 usd GDP growth rate -5,5% 1,7% Inflation rate 2,8% 4,2% Unemployment rate 6,8% 12% Minimum wage BGN 240 BGN 270 FDI inflow 3.4 b EUR 1.8 b. EUR GDP per capita Source: NSI Conclusion • Bulgaria is a beautiful country, with many natural advantages: a pleasant climate, spectacular Black Sea coastline with excellent beaches, picturesque mountainous regions. • It has always been, and remains, a country of transit between Europe and Asia, which has retained a strong sense of national identity whose folklore has been enriched rather than diminished by the experience of occupying forces. • Tourism is an important industry for Bulgaria, particularly during the transition from command to market economy, where it has the potential to attract increasing amounts of foreign currency to contribute to the prosperity of the country. • The Bulgarian tourism industry is already a successful international player in global tourism, which is appropriate for a beautiful, wellresourced country with fascinating history and traditions.
