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Bulgaria vs. Romania

Economy

BulgariaRomania
Economy - overview

Bulgaria, a former communist country that entered the EU in 2007, has an open economy that historically has demonstrated strong growth, but its per-capita income remains the lowest among EU members and its reliance on energy imports and foreign demand for its exports makes its growth sensitive to external market conditions.

The government undertook significant structural economic reforms in the 1990s to move the economy from a centralized, planned economy to a more liberal, market-driven economy. These reforms included privatization of state-owned enterprises, liberalization of trade, and strengthening of the tax system - changes that initially caused some economic hardships but later helped to attract investment, spur growth, and make gradual improvements to living conditions. From 2000 through 2008, Bulgaria maintained robust, average annual real GDP growth in excess of 6%, which was followed by a deep recession in 2009 as the financial crisis caused domestic demand, exports, capital inflows and industrial production to contract, prompting the government to rein in spending. Real GDP growth remained slow - less than 2% annually - until 2015, when demand from EU countries for Bulgarian exports, plus an inflow of EU development funds, boosted growth to more than 3%. In recent years, strong domestic demand combined with low international energy prices have contributed to Bulgaria's economic growth approaching 4% and have also helped to ease inflation. Bulgaria's prudent public financial management contributed to budget surpluses both in 2016 and 2017.

Bulgaria is heavily reliant on energy imports from Russia, a potential vulnerability, and is a participant in EU-backed efforts to diversify regional natural gas supplies. In late 2016, the Bulgarian Government provided funding to Bulgaria's National Electric Company to cover the $695 million compensation owed to Russian nuclear equipment manufacturer Atomstroyexport for the cancellation of the Belene Nuclear Power Plant project, which the Bulgarian Government terminated in 2012. As of early 2018, the government was floating the possibility of resurrecting the Belene project. The natural gas market, dominated by state-owned Bulgargaz, is also almost entirely supplied by Russia. Infrastructure projects such as the Inter-Connector Greece-Bulgaria and Inter-Connector Bulgaria-Serbia, which would enable Bulgaria to have access to non-Russian gas, have either stalled or made limited progress. In 2016, the Bulgarian Government established the State eGovernment Agency. This new agency is responsible for the electronic governance, coordinating national policies with the EU, and strengthening cybersecurity.

Despite a favorable investment regime, including low, flat corporate income taxes, significant challenges remain. Corruption in public administration, a weak judiciary, low productivity, lack of transparency in public procurements, and the presence of organized crime continue to hamper the country's investment climate and economic prospects.

Romania, which joined the EU on 1 January 2007, began the transition from communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. Romania's macroeconomic gains have only recently started to spur creation of a middle class and to address Romania's widespread poverty. Corruption and red tape continue to permeate the business environment.

In the aftermath of the global financial crisis, Romania signed a $26 billion emergency assistance package from the IMF, the EU, and other international lenders, but GDP contracted until 2011. In March 2011, Romania and the IMF/EU/World Bank signed a 24-month precautionary standby agreement, worth $6.6 billion, to promote fiscal discipline, encourage progress on structural reforms, and strengthen financial sector stability; no funds were drawn. In September 2013, Romanian authorities and the IMF/EU agreed to a follow-on standby agreement, worth $5.4 billion, to continue with reforms. This agreement expired in September 2015, and no funds were drawn. Progress on structural reforms has been uneven, and the economy still is vulnerable to external shocks.

Economic growth rebounded in the 2013-17 period, driven by strong industrial exports, excellent agricultural harvests, and, more recently, expansionary fiscal policies in 2016-2017 that nearly quadrupled Bucharest's annual fiscal deficit, from +0.8% of GDP in 2015 to -3% of GDP in 2016 and an estimated -3.4% in 2017. Industry outperformed other sectors of the economy in 2017. Exports remained an engine of economic growth, led by trade with the EU, which accounts for roughly 70% of Romania trade. Domestic demand was the major driver, due to tax cuts and large wage increases that began last year and are set to continue in 2018.

An aging population, emigration of skilled labor, significant tax evasion, insufficient health care, and an aggressive loosening of the fiscal package compromise Romania's long-term growth and economic stability and are the economy's top vulnerabilities.

GDP (purchasing power parity)$161.654 billion (2019 est.)

$155.894 billion (2018 est.)

$151.218 billion (2017 est.)

note: data are in 2010 dollars
$579.549 billion (2019 est.)

$556.442 billion (2018 est.)

$532.611 billion (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate3.39% (2019 est.)

3.2% (2018 est.)

3.5% (2017 est.)
4.2% (2019 est.)

4.54% (2018 est.)

7.11% (2017 est.)
GDP - per capita (PPP)$23,174 (2019 est.)

$22,191 (2018 est.)

$21,371 (2017 est.)

note: data are in 2010 dollars
$29,941 (2019 est.)

$28,576 (2018 est.)

$27,192 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 4.3% (2017 est.)

industry: 28% (2017 est.)

services: 67.4% (2017 est.)
agriculture: 4.2% (2017 est.)

industry: 33.2% (2017 est.)

services: 62.6% (2017 est.)
Population below poverty line23.8% (2019 est.)23.8% (2018 est.)
Household income or consumption by percentage sharelowest 10%: 1.9%

highest 10%: 31.2% (2017)
lowest 10%: 15.3%

highest 10%: 7.6% (2014 est.)
Inflation rate (consumer prices)3.1% (2019 est.)

2.8% (2018 est.)

2% (2017 est.)
3.8% (2019 est.)

4.6% (2018 est.)

1.3% (2017 est.)
Labor force3.113 million (2020 est.)

note: number of employed persons
4.889 million (2020 est.)
Labor force - by occupationagriculture: 6.8%

industry: 26.6%

services: 66.6% (2016 est.)
agriculture: 28.3%

industry: 28.9%

services: 42.8% (2014)
Unemployment rate5.66% (2019 est.)

6.18% (2018 est.)
3.06% (2019 est.)

3.56% (2018 est.)
Distribution of family income - Gini index40.4 (2017 est.)

38.3 (2016)
36 (2017 est.)

28.2 (2010)
Budgetrevenues: 20.35 billion (2017 est.)

expenditures: 19.35 billion (2017 est.)
revenues: 62.14 billion (2017 est.)

expenditures: 68.13 billion (2017 est.)
Industrieselectricity, gas, water; food, beverages, tobacco; machinery and equipment, automotive parts, base metals, chemical products, coke, refined petroleum, nuclear fuel; outsourcing centerselectric machinery and equipment, auto assembly, textiles and footwear, light machinery, metallurgy, chemicals, food processing, petroleum refining, mining, timber, construction materials
Industrial production growth rate3.6% (2017 est.)5.5% (2017 est.)
Agriculture - productswheat, maize, sunflower seed, milk, barley, rapeseed, potatoes, grapes, tomatoes, watermelonsmaize, wheat, milk, sunflower seed, potatoes, barley, grapes, sugar beet, rapeseed, plums/sloes
Exports$42.369 billion (2019 est.)

$40.779 billion (2018 est.)

$40.091 billion (2017 est.)
$114.311 billion (2019 est.)

$110.685 billion (2018 est.)

$105.188 billion (2017 est.)
Exports - commoditiesrefined petroleum, packaged medicines, copper, wheat, electricity (2019)cars and vehicle parts, insulated wiring, refined petroleum, electrical control boards, seats (2019)
Exports - partnersGermany 16%, Romania 8%, Italy 7%, Turkey 7%, Greece 6% (2019)Germany 22%, Italy 10%, France 7% (2019)
Imports$44.853 billion (2019 est.)

$42.841 billion (2018 est.)

$40.53 billion (2017 est.)
$136.091 billion (2019 est.)

$127.553 billion (2018 est.)

$117.292 billion (2017 est.)
Imports - commoditiescrude petroleum, copper, cars, packaged medicines, refined petroleum (2019)cars and vehicle parts, crude petroleum, packaged medicines, insulated wiring, broadcasting equipment (2019)
Imports - partnersGermany 11%, Russia 9%, Italy 7%, Romania 7%, Turkey 7% (2019)Germany 19%, Italy 9%, Hungary 7%, Poland 6%, China 5%, France 5% (2019)
Debt - external$39.059 billion (2019 est.)

$41.139 billion (2018 est.)
$117.829 billion (2019 est.)

$115.803 billion (2018 est.)
Exchange ratesleva (BGN) per US dollar -

1.61885 (2020 est.)

1.7669 (2019 est.)

1.7172 (2018 est.)

1.7644 (2014 est.)

1.4742 (2013 est.)
lei (RON) per US dollar -

4.02835 (2020 est.)

4.31655 (2019 est.)

4.0782 (2018 est.)

4.0057 (2014 est.)

3.3492 (2013 est.)
Fiscal yearcalendar yearcalendar year
Public debt23.9% of GDP (2017 est.)

27.4% of GDP (2016 est.)

note: defined by the EU's Maastricht Treaty as consolidated general government gross debt at nominal value, outstanding at the end of the year in the following categories of government liabilities: currency and deposits, securities other than shares excluding financial derivatives, and loans; general government sector comprises the subsectors: central government, state government, local government, and social security funds
36.8% of GDP (2017 est.)

38.8% of GDP (2016 est.)

note: defined by the EU's Maastricht Treaty as consolidated general government gross debt at nominal value, outstanding at the end of the year in the following categories of government liabilities: currency and deposits, securities other than shares excluding financial derivatives, and loans; general government sector comprises the subsectors: central government, state government, local government, and social security funds
Reserves of foreign exchange and gold$28.38 billion (31 December 2017 est.)

$25.13 billion (31 December 2016 est.)
$44.43 billion (31 December 2017 est.)

$40 billion (31 December 2016 est.)
Current Account Balance$2.06 billion (2019 est.)

$611 million (2018 est.)
-$11.389 billion (2019 est.)

-$10.78 billion (2018 est.)
GDP (official exchange rate)$68.49 billion (2019 est.)$249.543 billion (2019 est.)
Credit ratingsFitch rating: BBB (2017)

Moody's rating: Baa1 (2020)

Standard & Poors rating: BBB (2019)
Fitch rating: BBB- (2011)

Moody's rating: Baa3 (2006)

Standard & Poors rating: BBB- (2014)
Ease of Doing Business Index scoresOverall score: 72 (2020)

Starting a Business score: 85.4 (2020)

Trading score: 97.4 (2020)

Enforcement score: 67 (2020)
Overall score: 73.3 (2020)

Starting a Business score: 87.7 (2020)

Trading score: 100 (2020)

Enforcement score: 72.2 (2020)
Taxes and other revenues35.7% (of GDP) (2017 est.)29.3% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)1.8% (of GDP) (2017 est.)-2.8% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 8.9%

male: 9.3%

female: 8.3% (2019 est.)
total: 16.8%

male: 16.3%

female: 17.5% (2019 est.)
GDP - composition, by end usehousehold consumption: 61.6% (2017 est.)

government consumption: 16% (2017 est.)

investment in fixed capital: 19.2% (2017 est.)

investment in inventories: 1.7% (2017 est.)

exports of goods and services: 66.3% (2017 est.)

imports of goods and services: -64.8% (2017 est.)
household consumption: 70% (2017 est.)

government consumption: 7.7% (2017 est.)

investment in fixed capital: 22.6% (2017 est.)

investment in inventories: 1.9% (2017 est.)

exports of goods and services: 41.4% (2017 est.)

imports of goods and services: -43.6% (2017 est.)
Gross national saving26.1% of GDP (2019 est.)

24.2% of GDP (2018 est.)

25.3% of GDP (2017 est.)
18.3% of GDP (2019 est.)

18.1% of GDP (2018 est.)

20.3% of GDP (2017 est.)

Source: CIA Factbook