Bulgaria, a former Communist country that entered the EU on 1 January 2007, averaged more than 6% annual growth from 2004 to 2008, driven by significant amounts of bank lending, consumption, and foreign direct investment.
Successive governments have demonstrated a commitment to economic reforms and responsible fiscal planning, but the global downturn sharply reduced domestic demand, exports, capital inflows, and industrial production.
GDP contracted by 5.5% in 2009, stagnated in 2010, despite a significant recovery in exports, grew 1.7% in 2011, and 1% in 2012. Despite having a favorable investment regime, including low, flat corporate income taxes, significant challenges remain.
Corruption in public administration, a weak judiciary, and the presence of organized crime continue to hamper the country's investment climate and economic prospects.