Bulgarian Economics

Current economic policy in Bulgaria is directly related to the European Union policy for economic development, at least until 2010. The aspiration is for Bulgaria to become the most competitive entity in the world, with its competitiveness based on knowledge and fast developing economies, capable of achieving sustainable economic growth followed by more and better job opportunities and greater social stability.

Bulgaria has already achieved remarkable success. For the fifth consecutive year the country has achieved high economic growth. Since the start of the new millennium until Bulgaria has been hitting 4% or above in terms of economic growth. The figure in 2004 showed a remarkable 5.6%. The biggest contributor to this having been the Foreign Direct Investments pouring into the country for the last few years. For example, in 2004 21% of the GDP was constituted from FDI.

In terms of inflation Bulgaria has also achieved outstanding results – from 11.4% per annum in 2000 to a predicted 3.1% for 2006-07.

How does Bulgaria compare to other countries in Central and South-East Europe?

The overall volume of FDI, which constituted 10.1% of the GDP in 2004, is the biggest compared to the other Central and Eastern European Countries (Romania – 7.2%; Czech Republic – 4.4%).

Currency and Exchange Control

The new Law on the Bulgarian National Bank voted by the Parliament in June 1997, and the new Law on Banks adopted in July 1997, introduced a currency board in the country effective as of July 1, 1997. After the introduction of a currency board, all constraints on trading with hard currency within the country were removed. Local banks can sell hard currency to physical and legal entities without any limitations. The local currency is internally convertible.
 
The currency unit in Bulgaria is the Bulgarian Lev. Before July 5, 1999 it was denoted as BGL. Since the date mentioned, the Bulgarian Lev has been denominated in a ratio BGL 1,000 to BGN 1. At present the BGN is pegged to the Euro at the rate of BGN 1 per EUR 0.51129. Central exchange rates are quoted daily by the BNB for statistical and accounting purposes only. The Bulgarian National Bank (BNB) denominations are: Notes BGN 1, BGN 2,BGN 5, BGN 10, BGN 20, and BGN 50; Coins BGN 0.01, BGN 0.02, BGN 0.05, BGN 0.1, BGN 0.2, BGN 0.5. The Lev denomination has facilitated payments, accounting and exchange operations.
 
Every local or foreign person may own an unlimited number of accounts in any currency, in any bank in Bulgaria. There are no restrictions on the repatriation of earnings, capital, royalties or interest with regard to the foreign investments and repatriation payments can be made freely.
 
The foreign exchange regime is based on the principle of freedom of concluding transactions, actions and payments. Transfers are governed by the Foreign Currency Act (effective as of 1 January 2000); the regulation on export and import of Bulgarian Leva and foreign currency in cash, precious metals and stones (1999); the regulation on trans-border transfers and payments (1999); and the regulation on registration by the Bulgarian National Bank (BNB) of transactions between residents and non-residents (1999).
 
Bulgarian citizens as well as foreigners may take Bulgarian Leva and foreign currency of up to BGN 20,000 or its foreign exchange equivalent out of the country without documentation. However, the export of Leva and foreign currency between BGN 5,001 and BGN 20,000 or its foreign exchange equivalent should be declared at Customs. Transfers above BGN 20,000 must have a prior approval of the BNB. Foreigners are permitted to export as much currency over the foreign currency equivalent of BGN 20,000 as they have imported into Bulgaria without prior approval.
 
Payments abroad made by businesses (or self-employed business people) can be executed only through bank transfers. Transfers over BGN 20,000 for current international payments (imports of goods and services, transportation, interest and principal payments, insurance, training, medical treatment and other purposes defined by the Bulgarian regulations) must be supported by documentation showing the need and purpose of such payments.

Check the Current Exchange Rate >
Latest Exchange rates for the Lev against the Dollar, Euro, Pound and other currencies.