... as far as the construction pricess are concerned, the cheapest EU Member state is Bulgaria, which is 58% below the EU average.
more...
|
|
|
"Overall, PMR provided our company with an excellent level of service. As individuals, they were customer focused and a pleasure to work with. I couldn't recommend them highly enough. [...]"
Marketing Director, Leading European construction materials company
|
|
|
 | |
We are a member of the Society of Competitive Intelligence Professionals (SCIP).
|
 |
|
|
We are a member of the European Association of Opinion and Marketing Research Professionals ESOMAR.
|
|
|
|
 |
| Why to enter this market? |
- Member of the EU
- Stable currency, for years pegged with EUR
- Stable political environment
- Skilled workforce
- Employment costs lowest in the region
- Favourable legal environment for investorsLow inflation rate
|
Economical environment
Bulgaria has joined the EU in the recent entry wave of 2007 and has experienced over 7.6% growth in real GDP annually that year as well as in the 2008. According to the World Bank, in 2006 Bulgaria attracted the highest levels of foreign direct investment, as a share of GDP, among Eastern European countries. Despite the fact that GDP per capita is still low the recorded unemployment was recorded slightly above 6%. The currency has been pegged to the Euro for years now while, simultaneously, the employment costs are the lowest in the Union. Tax rates are low with just 10% corporate income tax. Located on the Black Sea and close to the Mediterranean Bulgaria offers opportunities as manufacturing hub for products targeted to the countries of the EU, former countries of the southern Soviet Union as well as the Middle East and offers massive opportunities in tourism development.
In Q2 2008 Bulgaria experienced the third strongest growth rate in the EU. The rising cost of risk and lower capital inflows will cap further increase of the growth rate which is forecasted to stabilize in area of 7.5%. The total value of GDP is expected to reach EUR 34.3bn in 2009 (compared with EUR 34.1 bn in 2008) which would result in the GDP per capita of around EUR 4.53k in 2009.
Bulgaria is tries to attract foreign investment by lowering the corporate tax rates to 10%, being the lowest rate in the European Union. Introduced in January 1, 2008, it is expected to decrease domestic labour costs and help reduce the share of the "gray" economy. In 2008 the FDI in Bulgaria amounted to EUR 5.7bn (down from EUR 8.3bn a year ago). Also to further enhance the local economic stability the Bulgarian parliament passed fiscal decentralization of municipalities in 2006, granting them authority over collection and administration of some taxes. Despite Bulgaria's large economic potential, organized crime and corruption remain problems.
Industry plays a key role in the Bulgarian economy. Although the country is not very rich in reserves of oil, and gas, it is a major producer of electricity and the most important exporter in the region due to the Kozloduy Nuclear Power Plant, which has a total capacity of 2000 MW. Ferrous metallurgy also has a major importance resulting in the fact that in production of steel and steel products per capita, the country is ranked first in the Balkans. About 14% of total industrial production relates to machine-building and 24% of the workforce is employed in this field. The most important Bulgarian natural resources are bauxite, copper, lead, zinc, coal, and timber.
In 2008 the unemployment rate has reached the lowest level for the last six years – 6.3%, whereas the forecast for 2009 assumes its hike to 10.2%.
Political environment
The Bulgarian unicameral parliament, the National Assembly consists of 240 deputies, each elected for four-year terms by popular vote. Bulgarian presidents are elected directly for a five-year term with the right to one re-election. The president serves as the head of state and commander in chief of the armed forces. Bulgaria joined NATO on 29 March 2004 and the European Union on 1 January 2007. Latest news on the Bulgarian politics include the EU Commission decided to freeze USD 500m in July 2008 of European funds due to the Government’s poor use of the funds and to the Government’s poor results in the fight against corruption and organized crime. Also after Bulgarian farmers’ protests, Bulgaria and the EU have agreed on an action plan to pay back farmers hit by EU’s decision to freeze agricultural subsidy.
Main challenges of the Bulgarian Government include speeding-up reforms in the five areas subject to the European Monitoring Regime. There is also strong dissatisfaction over the Country’s political life - support for the opposition party rose while Government’s popularity continued to fall.
The next parliamentary elections will take place in 2009 and the president is to be elected in 2010.
Social environment
Bulgaria has enjoyed substantial growth in income from international tourism over the past decade. Beach resorts on the Black Sea at Sozopol, Nessebur, Golden Sands, Sunny Beach, Sveti Vlas, Albena, Saints Constantine and Helena, among many others, are popular with tourists from Germany, Russia, Scandinavia, the Netherlands and the United Kingdom.
Ski resorts such as Samokov, Borovets, Bansko and Pamporovo are also a favourite destination for British and Irish tourists. Bulgaria now attracts close to 5 million visitors yearly. Tourism in Bulgaria makes a major contribution towards Bulgaria's annual economic growth of 6%-6.5%.
Infrastructure and technological environment
Bulgaria serves as a major crossroad between Europe, Asia and Africa thanks to its unique and strategic geographic location. The communication system in Bulgaria is relatively well developed and the total length of the roads is 102,016 km of which 93,855 km are paved and 416 km are motorways. The length of railways is 6,500 km of which more than 60% are electrified. Bulgarian sea transport also plays an important role. The main ports and harbours include the following: Burgas, Lom, Nesebur, Ruse, Varna and Vidin.
With regards to telecommunications it has grown faster than any other industry in the country. The internet penetration in late 2007 has reached 34% - a nearly sevenfold growth from just 5.4% in 2000, while in Q1 2008 the same parameter for the mobile telephony reached 137%.
In terms of energy resources Bulgaria has only the significant deposits of lignite while gas and oil are available only in the minor quantities and deposits of hard coal are not available for mining. What is remarkable 40% of the energy in Bulgaria comes from only one source being the Kozloduj atomic power plant with a capacity of 3.76 GW (however, out of six reactors only two are now working). Another atomic power plant in Belene with capacity of 1 GW is under construction. Country has also a number of thermal power plants fired with lignite out of which the biggest is Maritsa Iztok complex of three power plants which capacity exceeds 3 GW (Maritsa Iztok 2 is the biggest thermal power plant in the South Eastern Europe). In terms of hydropower the national network of this type of power generating plants has a combined capacity of nearly 2 GW out of which 70% are generated in two major hydropower projects.
General data
Area: 110,910 sq km
Population: 7. 6mn (2008)
Capital city: Sofia
Language: Bulgarian
Ethnic groups: Bulgarian 83.9%, Turk 9.4%, Roma 4.7%, other 2% (including Macedonian, Armenian, Tatar, Circassian)
Land boundaries: Greece, Macedonia, Romania, Serbia, Turkey
Major economic indicators
|
2006
|
2007
|
2008
|
2009f
|
2010f
|
| GDP (EUR bn) |
25.2
|
28.9
|
34.1
|
34.3
|
34.6
|
| Population (mn) |
7.7
|
7.6
|
7.6
|
7.6
|
7.5
|
| GDP per capita (EUR) |
3,286
|
3,782
|
4,485
|
4,530
|
4,594
|
| GDP (constant prices y-o-y %) |
6.3
|
6.2
|
6.0
|
-3.0
|
-0.9
|
| Private Consumption, real, y-o-y (%) |
8.5
|
5.1
|
4.5
|
-2.0
|
-1.4
|
| Exports, real, y-o-y (%) |
8.7
|
5.2
|
2.9
|
-11.6
|
-2.3
|
| Imports, real, y-o-y (%) |
14.0
|
9.9
|
4.9
|
-12.2
|
-4.8
|
| CPI (average, y-o-y %) |
7.3
|
8.4
|
12.4
|
3.5
|
1.8
|
| Central bank reference rate |
3.26
|
4.58
|
5.77
|
3.50
|
3.40
|
| Monthly wage, nominal (EUR) |
184
|
220
|
268
|
261
|
256
|
| Unemployment rate (%) |
9.1
|
6.9
|
6.3
|
10.2
|
12.0
|
| Net FDI (EUR bn) |
6.0
|
8.3
|
5.7
|
2.6
|
2.1
|
| FDI % GDP 23.9 |
23.9
|
28.7
|
16.7
|
7.5
|
6.0
|
| FX reserves (EUR bn) |
8.9
|
11.9
|
12.7
|
10.0
|
9.3
|
| Exchange rate to USD AVG |
1.56
|
1.43
|
1.33
|
1.51
|
1.49
|
| Exchange rate to EUR AVG |
1.96
|
1.96
|
1.96
|
1.96
|
1.96
|
Last update: Q2 2009
Useful data
Currency: Lev (BGL)
Exchange rate: EUR/Lev = 1.95583 (currency board fixed rate)
Time zone: GMT +2
Area code: +359
If you would like to find out more on the Bulgarian market opportunities please do not hesitate to contact us directly:
phone: (48 12) 292 22 50
faks (48 12) 292 22 99
e-mail: info@pmrconsulting.com
PMR Business Solutions in Bulgaria
Market reports Bulgaria
To purchase or find detailed information on PMR Publications reports covering the general economy, construction, retail, pharmaceutical, and ICT sectors in Bulgaria.
If you are looking for greater detail trust our research and consulting divisions to carry out projects tailored to your business needs.
Consulting in Bulgaria
PMR Consulting offers a wide range of consulting services in Central and Eastern Europe for foreign companies interested in the region. The typical projects include: competitive intelligence, sourcing, strategic advisory, consulting at foreign direct investments and mergers & acquisitions.
Market research in Bulgaria
PMR Research offers a full array of qualitative and quantitative research methodologies, providing services such as customer satisfaction studies, brand awareness and brand image research, distribution and competition studies, segmentation and sector analyses.
Case studies for Bulgaria
Albania | Bosnia & Herzegovina | Belarus | Bulgaria | Croatia | Czech Republic | Estonia | Hungary | Latvia | Lithuania | Macedonia | Montenegro | Poland | Romania | Russia | Serbia | Slovakia | Slovenia | Turkey | Ukraine
|
|
