BULGARIA
ECONOMY |
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Bulgaria's economy contracted dramatically after 1989 with the loss of the
Soviet market, to which the Bulgarian economy had been closely tied. The
standard of living fell by about 40%, but it regained pre-1990 levels in
June 2004. In addition, UN sanctions against Yugoslavia and Iraq took a
heavy toll on the Bulgarian economy. The first signs of recovery emerged in
1994 when the GDP grew and inflation fell. During 1996, however, the economy
collapsed due to poor economic reforms and an unstable banking system. Since
1997 the country has been on the path to recovery, with GDP growing at a
4-5% rate, increasing FDI, macroeconomic stability and EU membership set for
2007. |
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| The current government, elected in 2001, has pledged to maintain the
fundamental economic policy objectives adopted by its predecessor in 1997,
i.e., retaining the Currency Board, practicing sound financial policies,
accelerating privatisation, and pursuing structural reforms. While economic
forecasts for 2002 and 2003 predict continued growth in the Bulgarian
economy, the government still faces high unemployment and low standards of
living. Bulgaria has concluded accession talks with the European Union and
is set to join the block in 2007. |
