BULGARIA INDUSTRY OVERVIEW
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BULGARIA INDUSTRY OVERVIEW

GDP (Million $) – 103.099 (IMF, 2023)
GDP Per Capita ($) – 16.087
Growth Rate (%) – 1,66
Population – 6.409.000
Total Area (km2) – 110.993
Capital – Sofia

 

INDUSTRY

Bulgaria’s GDP per capita in PPP is still only slightly above half of the EU-27 average (62%), the lowest rate among all Member States. However, Bulgaria ranks 61st in the Ease of Doing Business rank list, higher than most other Eastern European states, and 32nd in the Economic Freedom of the World index (2023), outperforming Belgium, Italy, Poland, France, Hungary, and Portugal. It also introduced a set of tax laws aimed at supporting local businesses as well as attracting FDI. Bulgaria also has one of the lowest public debts in the EU.

Despite having the lowest GDP per capita in the EU, Bulgaria has good potential for further growth. It has undergone a significant transformation since the 1990s but still faces challenges in the form of institutional and governance weaknesses and negative demographic trends. In recent years, the economy has grown steadily above the EU average. After a contraction in 2020, the economy grew by 4.4% in 2021 with exports and consumption acting as the main drivers and maintained this pace in 2022.

The Bulgarian currency has been firmly pegged to the EUR, which provides good stability and eliminates risk in the trade. Since mid-2020, the country participates in the European exchange rate mechanism, which is one of the initial steps to adopting the euro as the official currency. The country expects to join the Eurozone in 2025.

The industry sector in Bulgaria primary deals with metallurgy and machine building. In fact, the country contributes to the manufacture of about 10% of the hydraulic machinery used in the world. Regarding metallurgy, the metal processing of iron and steel began after World War II and has been operational to this day. However, over the years, Bulgaria has engaged in the processing of other metals as well. The processed metals include iron, lead, zinc, copper, sulfuric acid, and steel in different parts of the country such as Pirdop, Kremikovtsi, and Kurdzhali. Besides metal, other products manufactured include machine tools, caustic soda, nuclear energy, military hardware, munitions, food, beverage, tobacco, textiles, and sugar.

Bulgaria’s major industrial exports include iron, steel, machinery, clothes, and refined fuels. Another big part of the industry sector is the shipbuilding business located in areas like Varna, Sofia, Plovdiv, Ruse, and Pernik.

Metal

Bulgaria is the sixth largest producer and processor of non-ferrous metals in the EU, accounting for 14% of European copper production, 8% of lead and 4% of zinc. Our country produces and exports over 1 million tonnes of rolled ferrous metals. Bulgarian Metal Imports are set to reach 5.6 million metric tons by 2026, a 1.3% year-on-year increase. Since 2005, demand has grown by 3.5% annually.

Metallurgy and Energy

The country has a strong metallurgical industry, which represents 20% of the country’s exports. Mining and its related industries employ a total of 120,000 people and generate about 5% of the country's GDP. Bulgaria is the third largest coal producer in the EU. Coal generates more than 45% of the country's electricity. Local deposits of coal, iron, copper, and lead are vital for the manufacturing and energy sectors. Extraction of metals and minerals, petroleum refining, and steel are among the major industrial activities. Almost all top export items of Bulgaria are industrial commodities such as oil products, copper products, and pharmaceuticals/chemicals.  Bulgaria is also an important power producer and exporter in the region.

Manufacturing

Bulgaria is the largest global producer of perfume essential oils such as lavender and rose oil. Other important sub-sectors include textiles (close ties with European manufacturers and foreign companies), engineering (supplies of components to foreign OEMs), and electrical engineering/electronics (mainly automotive components). However, the production with low added value still prevails within the local industry. Interestingly, Bulgaria has become a major producer of bicycles, both classic and electric, and is sometimes referred to as Europe's "bicycle valley". The country is moving forward to become the largest producer of e-bikes in Europe.