Bulgaria has weathered the impact of the global economic downturn relatively well, with the economy supported by generally prudent public finance management.
Continued reform to strengthen the foundations of economic freedom, however,will be indispensable in ensuring vibrant economic development in coming years. Lingering corruption and the weak rule of law have added to the cost of conducting business. Bulgaria’s transition to a more open and flexible economic system has been facilitated by substantial restructuring measures over the past decade. While maintaining macroeconomic stability, it has made considerable progress in income growth and poverty reduction. Competitive flat tax rates and a competitive trade regime, supported by a relatively efficient regulatory framework, have encouraged the development of a growing entrepreneurial sector.
Background: Bulgaria joined the European Union in January 2007 but has not adopted the euro. The center-right GERB (Citizens for European Development of Bulgaria) party was the clear winner in the July 2009 parliamentary elections but relies on the support of a right -wing nationalist group, Ataka, to pass legislation.
In late 2010, France and Germany announced that they would block Bulgaria from joining the EU’s passport-free zone until it makes “irreversible progress” in fighting corruption. Tourism, agriculture, and mining, including mining of coal, copper, and zinc, are the leading industries.