The largest online retailer in Russia specialising in CFA is Kupivip.ru.
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"From the beginning of the project, PMR was a professional partner who listened to our needs and catered their proposals according to our needs, their strengths and our budgetary constraints. [...]"
Director of Sourcing, Global marketer of consumer and commercial products
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We are a member of the Strategic and Competitive Intelligence Professionals (SCIP)
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We are a member of the European Association of Opinion and Marketing Research Professionals ESOMAR.
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| Why to enter this market? |
- Member of the EU
- Stable currency, pegged to the Euro for years
- Stable political environment
- Skilled workforce
- Employment costs are the lowest in the region
- Favourable legal environment for investors.
- Low inflation rate
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Business and economic environment
In the years prior to the global economic and financial crisis, Bulgaria was one of the most promising Central and Eastern European countries for foreign investors. It joined the EU in the last wave of 2007 and experienced growth in real GDP in excess of 7.6% that year, and again in 2008. Furthermore, according to the World Bank, in 2006 Bulgaria attracted the highest levels of foreign direct investment, as a share of GDP in the region. Despite the fact that per capita GDP was still low, unemployment was only slightly in excess of 6%. However, 2009 brought an economic recession, and the Bulgarian economy contracted by more than 5%, only to rebound a year later with a modest increase of 0.3%. Furthermore, the unemployment rate soared to 9.1% in 2009 and remained at a similar level (9.2%) in 2010.
2011 should bring a much needed recovery. Along with another increase in international and domestic demand, exports and consumption are expected to increase, and the economy should experience a more steady growth rate of 2-2.5%. Investments are also expected to recover, but, unlike the pre-crisis years, the increase will be slow and investors will be cautious.
The currency has been pegged to the Euro for years, whereas employment costs are the lowest in the Union. Tax rates are low, with a corporate rate of only 10%. Bulgaria, which is on the Black Sea coast and close to the Mediterranean, offers opportunities as a manufacturing hub for products aimed at the countries of the EU, the southern countries of the former Soviet Union and the Middle East, along with substantial tourism development opportunities.
The country has tried to attract foreign investment by reducing the corporate tax rate to 10%, the lowest in the European Union. This was introduced in January 2008 and is expected to cut domestic labour costs and to help reduce the prevalence of the “grey” economy. In 2009, FDI in Bulgaria came to EUR 3.24bn (in comparison with EUR 5.7bn the year before). In order to improve Bulgarian economic stability further, the country’s parliament approved the fiscal decentralisation of the municipalities in 2006, granting them the authority to collect and administer some taxes. Despite Bulgaria’s considerable economic potential, organised crime and corruption remain problematic.
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 because of the Kozloduy Nuclear Plant, which has a total capacity of 2,000 MW. Ferrous metallurgy is also particularly important: the country has pride of place in the Balkans in terms of per capita production of steel and steel products. About 14% of total industrial production involves machine assembly, 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 reached its lowest level in six years - 6.3% - but rose again, to 9.1% in 2009 and 9.2% in 2010.
The Bulgarian banking industry has weathered the crisis well, underpinned by prudent regulation and adequate capital buffers. However, the IMF has called for vigilance in light of a recent increase in the number of non-performing loans.
The next step for Bulgaria will be the adoption of the euro, and the country therefore needs to adjust its public policies and maintain fiscal discipline to prepare for this.
Political environment
Bulgaria’s single chamber parliament, the National Assembly, consists of 240 deputies, each elected for a four-year term by popular vote. Bulgarian presidents are elected directly for a five-year term, with a right to two terms. 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. In July 2008, the EU Commission decided to freeze USD 500m of European funds because of the government’s inefficient use of the funds and its disappointing performance in the fight against corruption and organised crime. In addition, after protests by Bulgarian farmers, Bulgaria and the EU agreed on an action plan to repay farmers affected by the EU’s decision to freeze agricultural subsidies.
The main challenges faced by the Bulgarian government include the need to speed up reforms in the five areas subject to the European Monitoring Regime. There is also widespread dissatisfaction with the country’s political life - support for the opposition party has increased, whereas the government’s popularity has continued to wane.
The next parliamentary elections will take place in 2013, and the presidential election in 2014.
Social environment
Bulgaria has enjoyed a substantial increase in revenue from international tourism over the past decade. Beach resorts on the Black Sea at Sozopol, Nessebur, Golden Sands, Sunny Beach, Sveti Vlas, Albena and 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 favoured destinations for British and Irish tourists. Bulgaria now attracts almost 5 million visitors every year. Tourism in Bulgaria makes a major contribution toward the country’s 6%-6.5% annual economic growth.
Infrastructure and technological environment
Bulgaria serves as a major crossroads between Europe, Asia and Africa because of its unique and strategic geographic location. The communication system in the country 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 railway tracks are 6,500 km long, and more than 60% of the network is electrified. Bulgarian sea transport also plays an important role. The main ports and harbours include: Burgas, Lom, Nesebur, Ruse, Varna and Vidin.
ICT has grown more rapidly than any other telecommunication industry in the country. The internet penetration rate reached 47.8% in late 2010 - an almost ninefold increase in comparison with just 5.4% in 2000, whereas in Q1 2011 the figure for mobile telephony was 149%.
In terms of energy resources, Bulgaria has significant deposits of lignite only. Gas and oil are available in small quantities, and deposits of hard coal are not available for mining. Surprisingly, 40% of energy in Bulgaria comes from only one source, the Kozloduj nuclear power station, which has a capacity of 3.76 GW (although only two of the six reactors are now working). Another nuclear power station in Belene, with a capacity of 1 GW, is being built. The country also has a number of thermal power plants fired by lignite, of which the largest is the three-plant Maritsa Iztok complex, the capacity of which exceeds 3 GW (Maritsa Iztok 2 is the largest thermal power station in south-eastern Europe). The national network of hydroelectric plants has a combined capacity of almost 2 GW, of which 70% is generated by two major facilities.
General data
Area: 110,910 sq km
Population: 7.01m (2010)
Capital: Sofia
Language: Bulgarian
Ethnic groups: Bulgarians 83.9%, Turks 9.4%, Roma 4.7%, others 2% (including Macedonians, Armenians, Tatars, Circassians)
National boundaries: Greece, Macedonia, Romania, Serbia, Turkey
Major economic indicators
| |
2007 |
2008 |
2009 |
2010 |
2011f |
| GDP (EUR bn) |
28.9 |
34.1 |
34.3 |
34.6 |
32.5 |
| Population (m) |
7.6 |
7.6 |
7.6 |
7.1 |
7.1 |
| GDP per capita (EUR) |
3782 |
4485 |
4530 |
4540 |
4505 |
| GDP (constant prices y-o-y %) |
6.2 |
6 |
-5 |
0.2 |
2 |
| Private Consumption, real, y-o-y (%) |
5.1 |
4.5 |
-2 |
-1.4 |
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| Exports, real, y-o-y (%) |
5.2 |
2.9 |
-11.6 |
-2.3 |
8.2 |
| Imports, real, y-o-y (%) |
9.9 |
4.9 |
-12.2 |
-4.8 |
0 |
| CPI (average, y-o-y %) |
8.4 |
12.4 |
3.5 |
1.8 |
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| Central bank reference rate |
4.58 |
5.77 |
3.5 |
3.4 |
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| Monthly wage, nominal (EUR) |
220 |
268 |
261 |
256 |
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| Unemployment rate (%) |
6.9 |
6.3 |
9.2 |
9.3 |
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| Net FDI (EUR bn) |
8.3 |
5.7 |
2.6 |
2.1 |
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| FDI % GDP 23.9 |
28.7 |
16.7 |
7.5 |
6 |
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| FX reserves (EUR bn) |
11.9 |
12.7 |
10 |
9.3 |
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| Exchange rate to USD AVG |
1.43 |
1.33 |
1.51 |
1.49 |
1.49 |
| Exchange rate to EUR AVG |
1.96 |
1.96 |
1.96 |
1.96 |
1.96 |
Last update: Q1 2011
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
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