In the first trimester of this year (January – March 2019), Bulgaria’s exports to EU countries increased by 7% compared to the same period in 2018. The amount of exported goods increased to a total of 4.9 billion euro. Bulgaria’s main trading partners are Germany, Romania, Italy, Greece, France and Belgium, which hold 67.3% of exports to EU countries. The sector of mineral fuels, mineral oils and all the products related to their distillation marks the greatest growth – 75.4% – while the one of oils, fats and waxes of animal or vegetable origin is declining of 8.4%. In this first trimester, imports from the EU also increased by 0.3% on an annual basis and reached to 5.01 billion euro. During this period, Bulgaria mainly imports from Germany, Italy, Romania, Greece and Hungary. The greatest growth in sales was recorded in the Beverage (alcoholic and non-alcoholic) and Tobacco sector (+50%) and the largest drop was seen in the Raw materials sector (excluding fuels) which has decreased by 29.4%.
In the period January-April 2019, exports to non-EU countries grew by 14.7% compared to the same period in 2018 and amounted to 3.02 billion euro. Among the non-EU countries, Bulgaria has mainly exported to Turkey, China, Serbia, United States, Russian Federation and North Macedonia, which hold 51.9% of the total exports to non-EU countries. In non-EU countries, the largest growth is seen in the sectors of mineral fuels, mineral oils and all the products related to their distillation (54.8%) and of oils, fats and waxes of animal or vegetable origin (40.2%). In the period from January to April 2019, imports from non-EU countries grew by 9.1% and reached to 161.7 million euro. Bulgaria imports mainly from the Russian Federation, Turkey, China and Egypt. The largest growth was recorded again by the sectors of alcoholic and non-alcoholic beverages and tobacco (32.3%), food and live animals (23.1%) and mineral fuels, mineral oils all the products related to their distillation (21.2%). The greatest drop is observed in the sector of oils, fats and waxes of animal or vegetable origin (-9.6%). In the January-April period total Bulgarian exports amounted to 9.54 billion euro and grew by 9.5% compared to the same period of 2018. In the same period the total Bulgarian imports amounted to 10.54 billion euro, or 4.6% growth on an annual basis. The total balance of foreign trade of the Country is negative, minus 994 million euro, while at FOB / FOB prices the balance is minus 277 million euro.
For years, the economy of Bulgaria has undergone a lasting restructuring process whereby some industries are growing rapidly and are increasing their share in the economy, while others are shrinking and reducing their burdens. Industry is among the growing branches of the Bulgarian economy, which has developed at a good pace since 2000 and increases its gross benefit, excluding the crisis period (2009-2010). Its share in the economy has also risen since the millennium - from 21% in gross value added in 2000, the industry in 2017 already accounts for a 24% share.
In addition to industrial goods, Bulgaria's economy also produces more and more services, which also often remain unnoticed. The ICT sector, the outsourcing of business services and the financial sector are among the increasingly important sectors of the economy, if we judge from their contribution to it. The ICT sector already has a share of 5.5% in gross value added (compared with 3.2% in 2000), outsourcing - 6,1%, and Finance and Insurance - 7.5%. At the same time, the sector that has been "losing ground" most visible in the local economy for the past 17 years is agriculture - despite the huge subsidies for it under the Common Agricultural Policy and national supplementary payments. In public services (administration, health, education, etc.) and real estate there is also a drop in shares, but much less.
In addition, here is what goods are being produced more and more in Bulgaria. The industry's most prominent developments since 2000 include metal products, electrical equipment, furniture, rubber and plastics, car parts, machinery, equipment and weapons, computer and communication equipment, wheels, paper and board.
In the above-mentioned processes, the increase of production from the beginning of 2000 to January 2018 is far above the average for the manufacturing industry and in some cases it reaches 3-4 times (see the information below). The reason for expansion is usually high competition in the foreign markets and significant export output, which is also confirmed by export data.
Change in Manufacturing Production (January 2018 vs. January 2000),%
Processing industry: 125.7 %
Manufacture of food products: 112.8%
Manufacture of beverages: 10.6%
Manufacture of tobacco products -54.8%
Manufacture of textiles and textile products, except apparel 48.2%
Production of clothing 58.0%
Leather processing, Manufacture of footwear and other articles of leather 8.4%
Manufacture of wood and of products of wood, except furniture 75.1%
Manufacture of paper, paperboard and other paper products 219.2%
Printing and reproduction of recorded media 72.8%
Manufacture of chemical products 65.8%
Manufacture of medical substances and products 18.0%
Manufacture of rubber and plastic products 399.5%
Manufacture of other non - metallic mineral products 139.6%
Manufacture of basic metals 156.0%
Manufacture of fabricated metal products, except
machinery and equipment 370.7%
Manufacture of computer and communication equipment,
electronic and optical products 252.0%
Manufacture of electrical equipment 494.6%
Manufacture of machinery and equipment, general and special 284.8%
Manufacture of motor vehicles, trailers and semi - trailers 385.5%
Manufacture of motor vehicles and not motor vehicles 278.9%
Furniture manufacturing 398.2%
Production not elsewhere classified 349.2%
Machinery and equipment maintenance and installation 88.7%
Consumer durables 513.1%
Products for intermediate consumption 122.2%
Consumer non - durable products 60.6%
Energy products 10.0%
Source: NSI, calendar-adjusted data
The only sector with a decline in production since 2000 has been tobacco products - because of health policies, the rise in prices due to the increase in excise duties, the illegal market and, in general, the shrinking consumption of such products throughout Europe and the developed countries. Among sub-sectors with relatively low performance (i.e. growth below the average for the whole sector) are leather, textiles, shoes, wood, beverages, food, etc. All of them traditionally belong to goods with a relatively low processing rate and relatively low benefit respectively. By contrast, most of the sectors that have grown sharply since 2000 are those adopted for sectors with high benefit, such as machinery, electrical equipment, computer and communication equipment, car components, bicycles, and more. They have increased their share of exports more than double since 2000 - from 11 to nearly 26%.
It is remarkable that all investment goods subsectors increase their share in the country's exports without exception. This restructuring towards commodities with higher benefit occurs at the expense of all other major product groups - energy resources, consumer goods, raw materials and materials. This does not mean that their exports are declining, on the contrary - its growth is relatively slower than that of investment goods. However, it is important to note that in the three groups mentioned above, whose share of total exports shrinks, and there are products that enjoy increasing weight in external sales. For example, in consumer goods, the proportion of food is rising; the same applies to feedstock, which also have a significantly higher share in 2017.
Overall, GDP, industrial output and exports data show the following:
1 / Bulgarian industry has been developing well since 2000 and has increased its weight in the economy, largely due to the expansion of the manufacturing industry;
2) In the manufacturing industry there is a steady trend of restructuring towards a higher share of high added value sub-sectors at the expense of those with a lower processing rate;
3) This restructuring process is mainly dictated by foreign markets and reflects the competitiveness of Bulgarian producers of commodities with relatively high benefit.