Bulgaria is an industrialised country with an open free market economy with a moderately advanced private sector and a number of strategic state-owned enterprises. Bulgaria, can be fairly characterised as an upper-middle-income country. Its gross national income per capita was 5,490 US$ in 2008. The last decade of the 20th century was a rather unstable and rigid economic period for the country. After the collapse of the communist regime and subsequently of the COMECON system, Bulgaria lost its political and economical anchor. This had as a result the fall of the standard of living by 40% and the creation of hyperinflation which surged in 1994 to 122% and 311% in 1996.

The above-mentioned situation remained almost the same until 1997. Then the actual economic transformation of the Bulgarian economy started. Until then the economic reforms that should had been applied in order for the economy to be transformed to a functional open market economy were not really integrated in the fiscal environment of the country. In 1997, pro-reform forces came into power and an ambitious economic reform package, including introduction of a currency board regime, was agreed to with the IMF and the World Bank, and the economy began to stabilize. This transformation resulted in the socio-economical and political stability.

Since 1997, macroeconomic stability was restored a fact that was highlighted by the growing in the rate of the per capita income that reached approximately 6% per year and with the substantial improvements in employment and investment. Additionally, average output growth exceeded 6% per year from 2004-08. Furthermore, the fiscal consolidation policy reduced the overall fiscal deficit of the country from 15.2% of GDP in 1996 to a balanced budget in 2003 and increasing fiscal surpluses since then. Finally, the prudent fiscal policy that the country pursued resulted in the reduction of the public and publicly guaranteed debt, from over 100% of GDP in 1997 to below 16% in 2008.

The aforementioned positive fiscal performance of the country resulted in the integration of the country in the European Union in 2007. This led to a creation of an advanced socio-economical system that was brought to Bulgaria from the tightened of the economical and fiscal relations of the Union with the country. Additionally, the incorporation of the country in the European Union led to some immediate international trade liberalization that fortunately provided no shock to the economy. Of course until now, despite the major development that the country underwent Bulgaria still has large income differences, something that reflect significant gaps in productivity, in the level and quality of human and physical capital stock and finally in the functioning of the open market economy. Furthermore, corruption in the public administration, a weak judiciary, and the presence of organized crime remain significant problems that must be solved in order for the country to further facilitate its economical and social reforms.

The global economic crisis that occurred during 2008 has undoubtedly disrupted the fast economic expansion that the country experienced after 1997. Gross Domestic Product (GDP) declined from 6% in 2008 to 4.2% year-on-year in the first half of 2009. Additionally, Exports declined by 18% year-on-year in the first half of 2009 and unemployment rose to 7% in July, 2009 from 5.3% in August, 2008.

Nevertheless, the positive fiscal developments of the previous years positioned Bulgaria in a relatively well place to face the global economic downturn. Of course, we should always take into consideration that the future prospects of Bulgaria are tied to the country's increasingly important integration with the European Union member state as the country is expected to join the Euro zone in 2013. This has as a result the creation of a more positive and prudent socio-economical future.