Economy of Bulgaria

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The economy of Bulgaria is an industrialised, open free market economy with a moderately advanced private sector and a number of strategic state-owned enterprises. Bulgaria is classified as an upper-middle-income country by the World Bank with a gross national income per capita of US$ 5,490 in 2008.[6] [7] The country is expected to join the Eurozone in 2013.

The economy declined dramatically during the 1990s with the collapse of the COMECON system and the loss of the Soviet market, to which the country had been closely tied. The standard of living fell by about 40%, and only regained pre-1989 levels by June 2004. In addition, UN sanctions against Serbia (1992–95) and Iraq took a heavy toll on the Bulgarian economy. The first signs of recovery emerged when GDP grew 1.4% in 1994 for the first time since 1988, and 2.5% in 1995. Inflation, which surged in 1994 to 122%, fell to 32.9% in 1995. During 1996, however, the economy collapsed due to an unstable and decentralised banking system, a wave of hyperinflation throughout several countries of Eastern Europe, and slow reforms, which led to an inflation rate of 311% and the collapse of the lev. When pro-reform forces came into power in the spring 1997, an ambitious economic reform package, including introduction of a currency board regime, was agreed to with the IMF and the World Bank, and the economy began to stabilise. The 2000s saw a steady pace of growth and budget surpluses, but shaky inflation.

As of 2010 the country is suffering from the results of the world financial crisis. That comes after a period of large trade deficits and real estate investment. Future prospects are tied to the country's increasingly important integration with the European Union member states. The country is expected to join the Eurozone in 2013.

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