Tue11202018

Last update12:12:22 PM

Back You are here: Home Property Where to Buy Economic Reasons to Invest in Bulgaria

Economic Reasons to Invest in Bulgaria

Despite decades under a Communist regime, Bulgaria has become one of South East Europe's healthiest economies. In fact, it has exceeded most analysts’ predictions and is starting to compete with other countries in this area. It has experienced outstandingly high growth figures and is now regarded as a stable growing economy by international economists.

During 2006 Gross Domestic Product (GDP) reached 5.5% compared to developed countries like the UK who experienced only 1.9%.

 

Bulgaria’s GDP was stimulated by powerful foreign investment coupled with growing demand from the domestic market. As GDP increases so does the local standard of living, which means that Bulgarians become wealthier due to higher productivity followed by wage increases.

The massive increase in investment has created increases in inflation, but the Bulgarian government remains on top of the situation with more plans to privatise state owned businesses. The Bulgarian government predict a lowering of inflation to around 4.4% this year compared to its present level of 9%.

The World Bank describes Bulgaria as "a good place for investment" – in the last four years it has improved its ranking from the bottom of the World Bank's league table for Eastern Europe to the top. In 2007, foreign direct investment (FDI) stood at four billion Euros, which has helped keep the country at the top of the rankings. Investors into Bulgaria’s property market are still experiencing gains in excess of 15% per year and whilst this figure has decreased over the last three years it is believed to now be a stable indicator of future real estate growth.

 

Stable Government

The Bulgarian government is headed by Sergiev Stanishev who represents the Socialist Party known as the BSP, but the government is made up of a coalition of parties namely the National Movement, Simeon II, and the Movement for Rights and Freedoms. Bulgaria’s President, Georgi Parvanov was also the former party leader of the BSP. The present government has forged ahead with rapid modernisation and construction, which has lead to the country’s accession to the European Union in 2007. Whilst Bulgaria has experienced some problems in keeping EU finance, changes to its organisational structure and control mechanisms to monitor EU funding have enabled the country to reapply for more aid to further develop its infrastructure. New EU funded projects include the building of a motorway network and the expansion and improvement of its airport network. These projects will ensure that Bulgaria is easily accessible to the outside world.

 

Growth in Tourist Revenues

Tourism is one of the country’s most important revenue streams and much is being done to modernise and stimulate growth in this sector.

The World Tourism Organisation described Bulgaria as one of the most interesting "new faces" in the tourist industry – over the last five years the country’s tourist industry has improved tenfold and the government persists with its plans to stimulate growth in this area. for this growth sector and tourism currently accounts for some 12% of the Bulgarian GDP.

Bulgaria benefits from a climate and geographical landscape ideal for summer and winter tourism. Currently tourism falls into two distinct seasons of summer and winter, but development of golf courses, spa resorts, which make use of the country’s abundant natural mineral resources and a growth in cultural tourism as Bulgaria shows off its natural and historical assets means that the country will benefit from an influx of visitors all year round.

Areas likely to benefit from such development are the coastal towns along Bulgaria’s 354 km long coastline, mountains regions, which not only offer great ski facilities and newly constructed golf and spa resorts but also 37,500 km of hiking trails, historic cities like Plovdiv and Veliko Tarnovo, which are home to numerous ancient, historical attractions and the capital, which is developing into an Eastern European style centre. The World Trade Organisation predicts that the number of visitors to Bulgaria by 2010 will exceed 20 million. Naturally the repercussions for the property market are extremely positive.

 

Increased Accessibility

Bulgaria has a distinctly advantageous location sharing its borders with Serbia, Greece, Macedonia, Romania, Montenegro and Turkey and EU funding to develop its road system is currently underway.

Bulgaria presently has four international airports – Sofia, Varna, Bourgas and Plovdiv – all are capable and are adapting to handle more air traffic. It is only a short flight from many key European cities and several budget airlines now offer low cost flights here. Last year Sofia airport added a new terminal to handle the increased passenger flow. Its strong historical association with other Eastern European countries like Russia and Ukraine and its relaxation in the once strict visa regime mean that more visitors from these countries are now starting to holiday and invest in Bulgaria.