General Macroeconomic Outlook


Official forecasts for the 2007 macroeconomic data seem to confirm the positive trend of the Bulgarian economy, even though the difficulties that have already emerged in 2006 have become more evident.
The growth of the GDP remains strong with an yearly increase of about 6%, a level significantly higher than the European average growth rate.
The service sector represents the most significant part of the Bulgarian economic structure. Within this sector it is possible to highlight the main sub-sectors: tourism, banking and financial mediation, as well as industry and agriculture.
Significant results have also been achieved in the unemployment rate that has decreased to 6,6%, a very close figure to the European average (7,2%).
A macroeconomic figure kept under strict observation is the inflation, that has reached 12,5% per annum (end-of-year 2007 data from the Bulgarian National Bank).
The negative trend of the inflation however cannot undervalue the fact that Bulgaria is virtuous in respecting all the other European economic parameters of Maastricht. The fiscal policy firmly conducted by the government has brought about positive effects such as primary surpluses and a public debt figure of around 25% of the GDP.
Monetary policy for instance will be further stabilized with the entrance in the European Exchange Rate Mechanism (2-ERM2), with which Sofia should remain linked for three or four years before gaining full membership in the European Monetary Union and adopt the Euro as its currency.

Another figure kept under strict observance is the current account deficit (mainly caused by the negative commercial balance). This has nonetheless been kept under control by the volume of the foreign direct investments (FDIs) coming into the Country, which in 2007 have almost reached 6 billion Euros.




  The trade trend between Bulgaria and the World has continued to be positive. This has been brought about by an increase of both exports (with a final figure for 2007 of 12,2%) and imports (second semester 2007 trend increase of 18,4%), ending up with a negative commercial balance.
As far as the geographic structure of the trade is concerned, Countries in the EU-area made-up about half of the Bulgarian trade. Over 80% of Bulgarian exports are directed towards Countries belonging to the EU and the Balkan area.
Italy ranks third both for buying Bulgarian products and selling to Bulgaria, and the trade between the two Countrie, with an yearly increase of imports towards Italy of 13%, and an increase of exports towards Bulgaria of 4,4%. In terms of monetary values Bulgaria exports good to Italy for around 1370 million Euros (2007 end-of-year aggregate data), against 1900 million Euros of imports from Italy (december 2007 data). It is therefore evident that the commercial balance remains favourable for Italy in terms of absolute monetary-value, but the gap is closing as time passes.