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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT MAY 2005
BULGARIAN STOCK EXCHANGE
ECONOMIC AND POLITICAL DEVELOPMENTS
Politic and Economic Environment:
Bulgaria’s monetary and fiscal policy,
macroeconomic and political stability,
functioning free-market economy, privatized
financial sector, favorable tax rates, flexible
labor laws and competitive wage rates all
have contributed to a quantifiable and
qualitatively improved business climate.
Bulgaria’s membership in NATO and the
forthcoming EU accession on January 1st,
2007 give additional guarantees to potential
investors.
The combination of high-growth, low
inflation, stable currency, low interest rate,
price and wage stability, low tax rates, low
budget deficit makes Bulgaria very
competitive in Central and Eastern Europe.
Bulgaria owes its progress to sound
monetary and fiscal policies in effect since
1997. A currency board, a fixed exchange
rate and conservative fiscal policy have led
to steady economic growth and a declining
government deficit, creating a business
climate conductive to private investments.
One of Bulgaria’s success stories has been
its stable currency. The Bulgarian lev has
Key Information Contacts
Financial Supervision Commission www.fsc.bg
Central Securities Depository www.cdad.bg
Bulgarian National Bank www.bnb.bg
Ministry of Finance www.uae.gov.ae/mop
Ministry of Economy and Commerce www.minfin.government.bg
ECONOMIC RATIOS
Domestic
savings
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Bulgaria
Lower-middle-income group
Trade
Indebtedness
Investment
been pegged to the Euro since 1997,
obviously, with a zero fluctuation in terms of
exchange rates.
Parliamentary elections will be held in June
2005. Whatever the outcome of these
elections the next Bulgarian government has
to follow the road-map to EU membership.
Economic Performance:
Key Economic Indicators:
• Real GDP growth was 4.9% in 2002 and
4.3% in 2003 and expected to be 5.6% in
2004.
• Inflation declined steadily over the last
years reaching 2.3% in 2003;
• Registered unemployment went down to
13.6% in 2003 (4% lower than the previous
year), which is the lowest level in 5 years;
• Estimations for 2004 are 12%
unemployment rate;
• After having declined continuously over 4
years to reach 4.7% in 2002, the current
account deficit has increased to 8.5% of
GDP in 2003. In 2004 the deficit was 6,9% of
GDP;
• The catching-up in terms of GDP per
capita, however has been very slow
GROWTH OF INVESTMENT AND GDP
(%)
40
20
0
-20
97
GDI GDP
remaining at only 29% of the EU-25 average
in 2003 (just a 3% increase from 1997); and
• Public debt has continued falling from
above 100% of GDP in 1997 to 46% of GDP
at the end of 2003. For 2004 the figure is
44%.
In its 2004 Regular Report, the European
Commission reiterated its recognition of
Bulgaria as being a functioning market
economy (first recognized as market
economy in 2002). Furthermore, the 2004
report concludes that Bulgaria should be
able to cope with competitive pressure and
market forces within the Union.
The Commission’s Regular Report also
mentions Bulgaria’s further good progress in
structural reforms over the last years. This
holds in particular for the increasing role of
the private sector through privatization and
the reduction of state aid, the positive
development of the banking sector and
some improvements in the regulatory
environment.
98 99 00 01 02 03
* World Bank reports