Bulgaria has an emerging market economy in the upper middle income range, where the private sector accounts for more than 80 per cent of GDP.] From a largely agricultural country with a predominantly rural population in 1948, by the 1980s Bulgaria had transformed into an industrial economy with scientific and technological research at the top of its budgetary expenditure priorities. The loss of COMECONmarkets in 1990 and the subsequent "shock therapy" of the planned system caused a steep decline in industrial and agricultural production, ultimately followed by an economic collapse in 1997. The economy largely recovered during a period of rapid growth several years later, but the average salary remains one of the lowest in the EU at 820 leva (€419) per month in September 2014. More than a fifth of the labour force are employed on a minimum wage of €1 per hour. Wages, however, account for only half of the total household income, owing to the substantial informal economy which amounts to almost 32% of GDP. Bulgarian PPS GDP per capita stood at 47 per cent of the EU average in 2013 according to Eurostat data, while the cost of living was 48 per cent of the average. The currency is the lev, which is pegged to the euro at a rate of 1.95583 levа for 1 euro. Bulgaria is not part of the eurozone and has abandoned its plans to adopt the euro.
Economic indicators have worsened amid the late-2000s financial crisis. After several consecutive years of high growth, GDP contracted 5.5 per cent in 2009 and unemployment remains above 12 per cent. Industrial output declined 10 per cent, mining by 31 per cent, and ferrous and metal production marked a 60 per cent drop. Positive growth was restored in 2010, although investments and consumption continue to decline steadily due to rising unemployment. The same year, intercompany debt exceeded €51 billion, meaning that 60 per cent of all Bulgarian companies were mutually indebted. By 2012, it had increased to €83 billion, or 227 per cent of GDP. The government implemented strict austerity measures with IMF and EU encouragement to some positive fiscal results, but the social consequences of these measures have been "catastrophic" according to the International Trade Union Confederation. Corruption remains another obstacle to economic growth. Bulgaria is one of the most corrupt European Union members and ranks 75th in the Corruption Perceptions Index. Weak law enforcement and overall low capacity of civil service remain as challenges in curbing corruption. However, fighting against corruption has become the focus of the government because of the EU accession, and several anti-corruption programs have been undertaken by different government agencies.
Economic activities are fostered by the lowest personal and corporate income tax rates in the EU,and the second-lowest public debt of all member states at 16.5 per cent of GDP in 2012. In 2013, GDP (PPP) was estimated at $119.6 billion, with a per capita value of $16,518.Sofia and the surrounding Yugozapaden planning area are the most developed region of the country with a per capita PPS GDP of $27,282 in 2011. Bulgaria is a net receiver of funds from the EU. The absolute amount of received funds was €589 million in 2009.
The labour force is 2.45 million people, of whom 7.1 per cent are employed in agriculture, 35.2 per cent are employed in industry and 57.7 per cent are employed in the services sector. Extraction of metals and minerals, production of chemicals, machinery and vehicle components, petroleum refining and steel are among the major industrial activities. Mining and its related industries employ a total of 120,000 people and generate about five per cent of the country's GDP. Bulgaria is Europe's sixth-largest coal producer. Local deposits of coal, iron, copper and lead are vital for the manufacturing and energy sectors. Almost all top export items of Bulgaria are industrial commodities such as oil products, copper products and pharmaceuticals. Bulgaria is also a net exporter of agricultural and food products, of which two-thirds go to OECD countries. It is the largest global producer of perfumery essential oils such as lavender and rose oil. Agriculture has declined significantly in the past two decades. Production in 2008 amounted to only 66 per cent of that between 1999 and 2001, while cereal and vegetable yields have dropped by nearly 40 per cent since 1990. Of the services sector, tourism is the most significant contributor to economic growth. In recent years, Bulgaria has emerged as a travelling destination with its inexpensive resorts and beaches outside the reach of the tourist industry. Lonely Planet ranked it among its top 10 destinations for 2011. Most of the visitors are British, Romanian, German and Russian. The capital Sofia, the medieval capital Veliko Tarnovo, coastal resorts Golden Sands and Sunny Beach and winter resorts Bansko, Pamporovo and Borovets are some of the locations most visited by tourists.