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COMPUTERWORLD | Articles | Business Environment
07 Mar

Bulgarian Economy: A Brief Look

by Konstantsa Grigorova

Bulgaria Facts and Numbers:
  • Area: 110,910 sq. km. / 42,822 square miles
  • Population (end 2006): 7 679 290 ( 3 720 932 males / 3 958 358 females)
  • Real GDP growth rate: 6.4% (2007)
  • Direct foreign investments: EUR 5,687 bln. EUR (19.9% from GDP for 2007)
  • Average annual inflation: 8.4% (2007)
  • Expected annual inflation: 4.5% (2008)
  • Annual inflation: 12.5% (12 months 2007)
  • Taxation: 10% flat tax rate for each of social security, income and corporate profit (2008)
  • Minimum monthly salary: 220 BGN (2008)
  • Average monthly salary: 355 BGN (2006)
  • University degrees: 22% of population
  • Low personnel turnover rate: 10%-15% per annum
  • Low company cost:
    • EUR 300-470 average for contact agents
    • EUR 550-650 average for supervisors
    Low annual average wage growth rate: 10%
  • Native language: Bulgarian
  • Foreign languages: English, German, French, Spanish, Russian
  • Religion: 83% Eastern Christian Orthodox
  • Government: Parliamentary democracy
  • Currency: BGN pegged to EUR at 1,95583:1
  • Affiliations: EU, NATO, WTO

The economic outlook for the EU8+2 in 2008 and 2009 is generally positive but just as in OECD economies, the baseline scenario is subject to substantial downside risk for economic growth and upside risk for inflation, according to the World Bank’s latest ‘EU8+2 Regular Economic Report’.“In 2008-2009, the region will take further, albeit shorter steps on its long road of catching-up to the EU15,” said Ron Hood, the Lead Economist at the World Bank and the principal author of the report. “GDP growth rates peaked in many countries in the first half of 2007, and remained robust in the second half of the year. This deceleration is likely to continue through 2008, most notably in the Baltic countries. Growth should recover gradually in Hungary which has been undergoing a protracted fiscal consolidation and from mid-2007 has been struggling with weak GDP growth and relatively high inflation.”

ICT in Bulgaria – January 2007

More than 5,000 companies are doing business in the ICT sector in Bulgaria. Top 100 of the ICT companies have created over 25,000 jobs in the country. By 2007, the Internet penetration index in Bulgaria reached about 34%, as the level in 2006 was 32.8%. The government believes that the start of the Intel World Ahead Programme in Bulgaria will lead to overcoming the digital divide in Bulgaria. The project is expected to help local households buy cheaper computers and get Internet connection and the needed education for basic computer literacy.

By January 2007, mobile telephone services market reached €686 million. Mobile networks (MobilTel, GloBul, Vivatel) covered approximately 86% of the territory of Bulgaria and 98% of the population. Fixed lines covered 85% of the households; the rate of digitalization planned by 2008 is 80%.

The country can make a boast of its human resource potential in ICT. As of the beginning of 2007, from 32,574 enrolled students the main part take computer systems and technologies – total 6,564 people (see Sheet Talent pool – Technical programs). The second place belongs to the enrolled students in informatics – 5,465 people. About 4,800 is the number of the enrolled students in Communication Systems and Technologies, about 4,700 – in machine building and about 4,000 – in electrical engineering. An interesting fact is that although the highest number of enrolled students is in computer systems and technologies, the highest number of graduates is in informatics, which means that this is the most successful ICT discipline in Bulgarian higher education.

Talent pool – Technical programs

University programs Students enrolled Graduates
Computer systems and technologies 6564 833
Informatics 5465 1218
Communication systems and technologies 4822 966
Machine building 4737 779
Electrical engineering 4016 559
Automation 2757 513
Electronics 2297 343
Engineering-combined programs 1916 479
Total 32574 5690

Source: National Statistics Institute

The list of top investors in the ICT industry in Bulgaria shows a picture typical for the whole Europe – the names of IBM, Hewlett-Packard, Microsoft, SAP Labs, Cisco could not stay unmarked. (see sheet Top foreign companies). By now the record of employed specialists stays at the HP`s Global Delivery Support Centre, which engaged more than 1,000 employees.

Top foreign ICT companies in Bulgaria

Date Company Activity Jobs  
2007 IBM Procurement Centre 200
2007 Microsoft Bulgaria Global Delivery Support Centre n/a
2006 Software AG (Germany) Software Development Centre n/a
2006 Microsoft (USA) Technical Support Centre 100
2006 Hewlett Packard (USA) Global Delivery Support Centre 1000
2005 IBM (USA) Procurement Centre 25
2004 Ami Semiconductor Mixed-signal Design Centre 20
2003 Tumbleweed (USA) Software Development Operation 100
2001 Johnson Controls (USA) Technology Centre (Mechanical design, Electronics design, Software development) 290
2000 SAP Labs Bulgaria (Germany) Development of Java Application Server and SAP Composite Application Framework 300
1999 CISCO (USA) Local sales support and 155 Cisco Academies 24

Sources: Invest Bulgaria Agency, EITO, National Statistical Institute, State Agency for Information Technology and Communications

Business Process Operations in Bulgaria

Speaking of business process operations in Bulgaria, the main foreign companies’ activity is outsourcing. The data provided by the National Statistics Institute for January 2007 shows that the country has a great potential of young talents – about 14,000 graduates in business studies and about 7,000 graduates in technical sciences (see Sheets Talent Pool – Business Studies – January 2007 and Talent pool – Technical Sciences – January 2007).

Talent Pool – Business Studies – January 2007

University Programs Students Enrolled Graduates
Finance & Accounting 17078 5881
Economics 12445 3576
Business Administration 12095 1929
Marketing 4805 1441
International Business Relations 4606 1402

Source: National Statistics Institute

Some of the main companies with business process operations in Bulgaria are identical with the top foreign ICT companies – IBM and Hewlett-Packard. Remarkable in this chart is the fact, that all the non IT companies – starting with OPI Global, C3i, SysMaster, Coca Cola, Aplus, Money Gram, PlusServer and IMRO – all have invested in IT activities (mostly some mode of support center – see Chart Foreign Businеss Process Operations in Bulgaria – January 2007).

Foreign Businеss Process Operations in Bulgaria – January 2007

Date Company Activity Jobs
Sep 06 IBM Procurement Centre n/a
Jan 06 Hewlett Packard Global services support centre 400
May 06 OPI Global F&A support centre 20
June 05 C3i IT help desk 50
April 05 SysMaster Sales of SysMaster and VoiceMaster products to EMEA + technical support help desk 25
2005 Coca Cola IT Support Shared Services Center ~80
Jan 04 Aplus IT support center 50
Oct 04 MoneyGram Customer support center 70
2004 PlusServer Linux server help desk and direct marketing call center services 50
April 03 IMRO Direct marketing + technical support center ~500

Source: Invest Bulgaria Agency

Electronics Industry

Most of the major players of the electronics industry in Bulgaria are located in the capital Sofia (see Sheet Investors in the sector). Among the main representatives of this industry are EPIQ, SET, Johnson Controls, Datecs, Melexis, HIC, Teletek and Deltacom. Over 180 million USD foreign investments have been made in this sector and about 75% of the production is addressed for export.

Major players of the electronics industry in Bulgaria

Company Location Employees
EPIQ Electronic Assembly Botevgrad 2500
SET Rousse 400
Johnson Controls Sofia 340
Datecs Sofia 250
Melexis Sofia 230
HIC Sofia 120
Teletek Electronics Sofia 105
Deltacom Electronics Sofia 100

Source: Invest Bulgaria Agency, May 2007


  • 75% exports
  • over $180 million foreign investments
  • Markets served – automotive, telecommunications and consumer electronics
  • Quality management systems applied – ISO 9000, ISO 16949
  • Highly-qualified and experienced work force currently around 12,000 people
  • Competitive labor productivity

Source: Invest Bulgaria Agency, May 2007

Export of spare parts and accessories for automatic data processing machines, USD m

Source: National Statistics Institute

Export of custom electronic networks, USD m

Source: National Statistics Institute

By the end of 2006 – 2007 the lowest monthly salaries for SMD operator in manufacturing are EUR 200 and the maximum – EUR 300. The monthly salaries for electronic test engineers begins from EUR 456 and reaches at EUR 828. (see Sheet Labour cost)

Vocational schools with electronic curriculum

Number of graduates in electronics related specialties (2006)

Specialty Bachelor Master Total
Electronics 239 104 343
Automation and information techniques 380 133 513
Computer systems and technologies 642 168 810
Communication engineering & technologies 649 278 927

Source: National Statistics Institute

Labour cost

Tentative monthly salaries in manufacturing, large cities, EUR, 2006

Position Gross salary Total cost
SMD operator (min) 200 248
SMD operator (max) 300 372
Electronics test engineer (min) 456 600
Electronics test engineer (max) 828 1000
Note: Salaries in Sofia can exceed the max range

Source: Company information For The Invest Bulgaria Agency

There are about 2,600 graduates in electronics related specialties in Bulgaria and highly-qualified and experienced work force currently of around 12,000 people (see Sheet Vocational schools with electronic curriculum).

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