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Serbia vs. Bulgaria

Economy

SerbiaBulgaria
Economy - overview

Serbia has a transitional economy largely dominated by market forces, but the state sector remains significant in certain areas. The economy relies on manufacturing and exports, driven largely by foreign investment. MILOSEVIC-era mismanagement of the economy, an extended period of international economic sanctions, civil war, and the damage to Yugoslavia's infrastructure and industry during the NATO airstrikes in 1999 left the economy worse off than it was in 1990. In 2015, Serbia's GDP was 27.5% below where it was in 1989.

After former Federal Yugoslav President MILOSEVIC was ousted in September 2000, the Democratic Opposition of Serbia (DOS) coalition government implemented stabilization measures and embarked on a market reform program. Serbia renewed its membership in the IMF in December 2000 and rejoined the World Bank and the European Bank for Reconstruction and Development. Serbia has made progress in trade liberalization and enterprise restructuring and privatization, but many large enterprises - including the power utilities, telecommunications company, natural gas company, and others - remain state-owned. Serbia has made some progress towards EU membership, gaining candidate status in March 2012. In January 2014, Serbia's EU accession talks officially opened and, as of December 2017, Serbia had opened 12 negotiating chapters including one on foreign trade. Serbia's negotiations with the WTO are advanced, with the country's complete ban on the trade and cultivation of agricultural biotechnology products representing the primary remaining obstacle to accession. Serbia maintains a three-year Stand-by Arrangement with the IMF worth approximately $1.3 billion that is scheduled to end in February 2018. The government has shown progress implementing economic reforms, such as fiscal consolidation, privatization, and reducing public spending.

Unemployment in Serbia, while relatively low (16% in 2017) compared with its Balkan neighbors, remains significantly above the European average. Serbia is slowly implementing structural economic reforms needed to ensure the country's long-term prosperity. Serbia reduced its budget deficit to 1.7% of GDP and its public debt to 71% of GDP in 2017. Public debt had more than doubled between 2008 and 2015. Serbia's concerns about inflation and exchange-rate stability preclude the use of expansionary monetary policy.

Major economic challenges ahead include: stagnant household incomes; the need for private sector job creation; structural reforms of state-owned companies; strategic public sector reforms; and the need for new foreign direct investment. Other serious longer-term challenges include an inefficient judicial system, high levels of corruption, and an aging population. Factors favorable to Serbia's economic growth include the economic reforms it is undergoing as part of its EU accession process and IMF agreement, its strategic location, a relatively inexpensive and skilled labor force, and free trade agreements with the EU, Russia, Turkey, and countries that are members of the Central European Free Trade Agreement.

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.

GDP (purchasing power parity)$126.625 billion (2019 est.)

$121.464 billion (2018 est.)

$116.239 billion (2017 est.)

note: data are in 2010 dollars
$161.654 billion (2019 est.)

$155.894 billion (2018 est.)

$151.218 billion (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate4.18% (2019 est.)

4.4% (2018 est.)

2.05% (2017 est.)
3.39% (2019 est.)

3.2% (2018 est.)

3.5% (2017 est.)
GDP - per capita (PPP)$18,233 (2019 est.)

$17,395 (2018 est.)

$16,556 (2017 est.)

note: data are in 2010 dollars
$23,174 (2019 est.)

$22,191 (2018 est.)

$21,371 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 9.8% (2017 est.)

industry: 41.1% (2017 est.)

services: 49.1% (2017 est.)
agriculture: 4.3% (2017 est.)

industry: 28% (2017 est.)

services: 67.4% (2017 est.)
Population below poverty line23.2% (2018 est.)23.8% (2019 est.)
Household income or consumption by percentage sharelowest 10%: 2.2%

highest 10%: 23.8% (2011)
lowest 10%: 1.9%

highest 10%: 31.2% (2017)
Inflation rate (consumer prices)-0.1% (2019 est.)

-1.1% (2018 est.)

2% (2017 est.)
3.1% (2019 est.)

2.8% (2018 est.)

2% (2017 est.)
Labor force3 million (2020 est.)3.113 million (2020 est.)

note: number of employed persons
Labor force - by occupationagriculture: 19.4%

industry: 24.5%

services: 56.1% (2017 est.)
agriculture: 6.8%

industry: 26.6%

services: 66.6% (2016 est.)
Unemployment rate14.1% (2017 est.)

15.9% (2016 est.)
5.66% (2019 est.)

6.18% (2018 est.)
Distribution of family income - Gini index36.2 (2017 est.)

28.2 (2008 est.)
40.4 (2017 est.)

38.3 (2016)
Budgetrevenues: 17.69 billion (2017 est.)

expenditures: 17.59 billion (2017 est.)

note: data include both central government and local goverment budgets
revenues: 20.35 billion (2017 est.)

expenditures: 19.35 billion (2017 est.)
Industriesautomobiles, base metals, furniture, food processing, machinery, chemicals, sugar, tires, clothes, pharmaceuticalselectricity, gas, water; food, beverages, tobacco; machinery and equipment, automotive parts, base metals, chemical products, coke, refined petroleum, nuclear fuel; outsourcing centers
Industrial production growth rate3.9% (2017 est.)3.6% (2017 est.)
Agriculture - productsmaize, wheat, sugar beet, milk, sunflower seed, potatoes, soybeans, plums/sloes, apples, barleywheat, maize, sunflower seed, milk, barley, rapeseed, potatoes, grapes, tomatoes, watermelons
Exports$15.92 billion (2017 est.)

$13.99 billion (2016 est.)
$42.369 billion (2019 est.)

$40.779 billion (2018 est.)

$40.091 billion (2017 est.)
Exports - commoditiesinsulated wiring, tires, corn, cars, iron products, copper (2019)refined petroleum, packaged medicines, copper, wheat, electricity (2019)
Exports - partnersGermany 12%, Italy 10%, Bosnia and Herzegovina 7%, Romania 6%, Russia 5%  (2019)Germany 16%, Romania 8%, Italy 7%, Turkey 7%, Greece 6% (2019)
Imports$20.44 billion (2017 est.)

$17.63 billion (2016 est.)
$44.853 billion (2019 est.)

$42.841 billion (2018 est.)

$40.53 billion (2017 est.)
Imports - commoditiescrude petroleum, cars, packaged medicines, natural gas, refined petroleum (2019)crude petroleum, copper, cars, packaged medicines, refined petroleum (2019)
Imports - partnersGermany 13%, Russia 9%, Italy 8%, Hungary 6%, China 5%, Turkey 5% (2019)Germany 11%, Russia 9%, Italy 7%, Romania 7%, Turkey 7% (2019)
Debt - external$30.927 billion (2019 est.)

$30.618 billion (2018 est.)
$39.059 billion (2019 est.)

$41.139 billion (2018 est.)
Exchange ratesSerbian dinars (RSD) per US dollar -

112.4 (2017 est.)

111.278 (2016 est.)

111.278 (2015 est.)

108.811 (2014 est.)

88.405 (2013 est.)
leva (BGN) per US dollar -

1.61885 (2020 est.)

1.7669 (2019 est.)

1.7172 (2018 est.)

1.7644 (2014 est.)

1.4742 (2013 est.)
Public debt62.5% of GDP (2017 est.)

73.1% of GDP (2016 est.)
23.9% 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
Reserves of foreign exchange and gold$11.91 billion (31 December 2017 est.)

$10.76 billion (31 December 2016 est.)
$28.38 billion (31 December 2017 est.)

$25.13 billion (31 December 2016 est.)
Current Account Balance-$2.354 billion (2017 est.)

-$1.189 billion (2016 est.)
$2.06 billion (2019 est.)

$611 million (2018 est.)
GDP (official exchange rate)$51.449 billion (2019 est.)$68.49 billion (2019 est.)
Credit ratingsFitch rating: BB+ (2019)

Moody's rating: Ba3 (2017)

Standard & Poors rating: BB+ (2019)
Fitch rating: BBB (2017)

Moody's rating: Baa1 (2020)

Standard & Poors rating: BBB (2019)
Ease of Doing Business Index scoresOverall score: 75.7 (2020)

Starting a Business score: 89.3 (2020)

Trading score: 96.6 (2020)

Enforcement score: 63.1 (2020)
Overall score: 72 (2020)

Starting a Business score: 85.4 (2020)

Trading score: 97.4 (2020)

Enforcement score: 67 (2020)
Taxes and other revenues42.7% (of GDP) (2017 est.)35.7% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)0.2% (of GDP) (2017 est.)1.8% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 27.5%

male: 26.1%

female: 29.9% (2019 est.)
total: 8.9%

male: 9.3%

female: 8.3% (2019 est.)
GDP - composition, by end usehousehold consumption: 78.2% (2017 est.)

government consumption: 10.1% (2017 est.)

investment in fixed capital: 18.5% (2017 est.)

investment in inventories: 2% (2017 est.)

exports of goods and services: 52.5% (2017 est.)

imports of goods and services: -61.3% (2017 est.)
household 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.)
Gross national saving18.2% of GDP (2019 est.)

18.7% of GDP (2018 est.)

15.5% of GDP (2017 est.)
26.1% of GDP (2019 est.)

24.2% of GDP (2018 est.)

25.3% of GDP (2017 est.)

Source: CIA Factbook