Bulgaria underwent significant transformation after the fall of the Berlin wall over three decades ago. The country changed from a centralized, planned economy to an open, market-based, middle-income economy anchored in the European Union and NATO.  The advancement of structural reforms starting in the late 1990s and the introduction of the currency board spurred improved living standards. As one of the EU’s newest members, Bulgaria is an emerging market providing opportunities for U.S. companies.

Bulgaria has been on a positive economic arch although the Ukraine war and elevated inflation poses risks for robust growth. In 2021, we saw Bulgaria’s economy grow 4.2%.  For 2022, the European Bank for Reconstruction and Development (EBRD) estimated that Bulgaria may grow to 2.5%.  Moreover, the total U.S.-Bulgaria bilateral trade in goods in 2021 rebounded to US$1.5 billion, a 22% increase from the year before. Moreover, the data looks even more promising if we examine the latest total trade numbers (from January to June of 2022), where the data shows an almost 53% surge compared to the same period last year.

However, downward pressures include the lingering Covid 19 impact, the Ukraine war, a declining population, and a tight labor market. The political situation will remain rocky because the reformist political party that came to power lost its mandate and elections are expected later this year.   

potential recovery could be driven by higher wages, EU-funded post-COVID public investment funds, and export increases. Bulgaria expects to receive up to EUR 6.2 billion over a six-year period (2021-2026) from the EU’s post-COVID recovery grant funds to improve its economy in areas including green energy, digitalization, and private sector development.

Moreover, the government expects to adopt the Euro in early 2024, following joining the European Exchange Rate Mechanism (ERM II) in July 2020 and the EU’s Banking Union in October 2020. The adoption of the euro will mitigate currency risk and help reduce transaction costs with some of the country’s key European trading partners.

This report will identify some challenges and then highlight the leading sectors for U.S. companies, that include agriculture and equipment for this sector, energy, environmental technologies, healthcare, IT, tourism, and safety & security.

Political & Economic Environment:  State Department’s website for background on the country’s political environment.