Economy—overview: One of the poorest countries of central Europe Bulgaria has slowly been moving from its old command economy towards a market-oriented economy. The economy faced a major crisis in 1996 marked by a banking system in turmoil a depreciating currency and contracting production and foreign trade. Foreign exchange reserves dwindled to $518 million while dramatically hiked interest rates added to the domestic debt burden and stifled growth. GDP fell by 11% in 1996 after experiencing 2.0% growth in 1995. Privatization of state-owned industries stagnated although the first auction of a mass privatization program was undertaken in late 1996. Lagging progress on structural reforms led to postponement of IMF disbursements under a $580 million standby loan agreed to in July 1996. In November 1996 the IMF proposed a currency board as Bulgaria's best chance to restore confidence in the lev eliminate unnecessary spending and avoid hyperinflation. The board was set up on 1 July 1997. Its establishment was followed by a reduction in inflation and interest rates and by a rise in foreign investment. Simultaneously the government pledged to sell off some of the most attractive state assets. GDP in 1997 dropped 7.4% but is expected to rebound to an estimated 2% in 1998. Other government objectives include: the completion of land reform the privatization and strengthening of the banking system and the modernization of the legal environment of business.
GDP: purchasing power parity—$35.6 billion (1997 est.)
GDP—real growth rate: -7.4% (1997 est.)
GDP—per capita: purchasing power parity—$4 100 (1997 est.)
Exports: total value: $4.9 billion (f.o.b. 1997) commodities: machinery and equipment 15.2%; agriculture and food 18.9%; textiles and apparel 14.8%; metals minerals and fuels 26.5%; chemicals and plastics 20%; other 4.6% (1996) partners: OECD 50.0% (EU 37.2%); CIS and Central and Eastern Europe 32.4%; Arab countries 5.8%; other 11.8% (1995)
Imports: total value: $4.5 billion (f.o.b. 1997 est.) commodities: fuels minerals and raw materials 40.7%; machinery and equipment 18.4%; textiles and apparel 11.6%; agricultural products 7.5%; metals and ores 5.2%; chemicals and plastics 12.2%; other 4.4% (1996) partners: OECD 45.5% (EU 38.1%); CIS and Central and Eastern European countries 41.1%; Arab countries 1.8%; other 11.6% (1995)
