The economy of Bulgaria is an industrialised, open free market economy with a moderately advanced private sector and a number of strategic state-owned enterprises. Critical and strategic industries are owned by the state. The economy is upper middle income economy, which has registered steady growth in the recent past, with a historical growth rate average of 6% a year. Successful foreign direct investment and successive governments have demonstrated a commitment to economic reforms and responsible fiscal planning has contributed greatly to the Bulgarian economy. Bulgaria has developed a number of trade brands and has arranged several successful international partnerships.
Bulgaria is the world's 74th largest country by Gross Domestic Product (GDP). Bulgaria's agriculture, industry, and services sectors account for 4.6%, 28.7%, and 66.7% of its GDP, respectively. Bulgaria has six free trade zones. All the zones are located at strategic transport hubs to facilitate swift transportation to international trade routes to neighbouring countries.
Foreign direct investment indicates international investment in which the foreign direct investor obtains a lasting interest in an enterprise resident of the Bulgarian economy (direct investment enterprise). The foreign direct investment comprises the initial transaction establishing the relationship between the direct investor and the direct investment enterprise, as well as all subsequent transactions between them and among affiliated enterprises, both incorporated and unincorporated. It is clear from the graph above that the Netherlands and Germany are among the top investors in Bulgaria, while the others show steady interest.
The Bulgarian economy relies a great deal on its industry. The country's dominant industries are mining and energy. The abundant natural resources like copper, lead, zinc, and coal are count for 11.4% of Bulgaria's main exports, the other major products include refined petroleum fuels, iron, gold, electronics, bismuth, coal, vehicle components, weapons and construction materials. Bulgaria's primary agricultural crops include wheat, corn, barley, sugar beats, sunflowers and various fruits.
Recently, imports of industrial raw materials rose by more than 8 percent and imports associated with the recovering metallurgical sector also grew, while those required by the food sector fell. The greatest growth in imports by far was in energy, 56 percent, mainly imported from Russia.
Bulgaria is one of the most popular locations for European investors. Recent infrastructure improvements to supplement increased tourism provide the background for investment property in Bulgaria to become a stable market.
The investments, therefore, are mainly in the sphere of real estate and tourism, though the number of investments made in agriculture has steadily increased annually. Bulgaria has gained popularity for its well priced properties and excellent buy-to-let opportunities. Investments in ideal locations are fetching high capital returns of a minimum of 15% per annum.
The above graph depicts the average of inward and outward Foreign Direct Investment (FDI) flows divided by gross domestic product (GDP). The graph represents steady growth in foreign direct investment. The index measures the intensity of investment integration within the international economy. Data are expressed as percentage of GDP to remove the effect of differences in the size of the economies of the reporting countries.
* Includes Russia, Ukraine, Switzerland, Gibraltar (GB), Moldova, Belarus, Norway, Lichtenstein, San Marino, Iceland and Monaco.
** Includes Turkey, Serbia, Montenegro, Macedonia, Albania, Croatia and Bosnia and Herzegovina.
*** Includes Brazil, Canada and United States
**** Includes China, Georgia and Japan