Over the first seven months of this year Bulgaria’s imports have exceeded exports by EUR 2.25 billion. That is the gap in the country’s trade balance and it is EUR 170 million wider than it was a year ago.

Few countries in the world do not have a trade deficit. But many are not particularly worried as they rely on making up for it in other ways, with the help of a positive balance of payments, for example. But when this gap is chronic, as is the case in Bulgaria, things get serious. Looking back at the past ten years or so, it is difficult to find at least one when the balance of trade has been in favour of exports. Adding to this the hole in the budget that has, in recent months been growing to alarming proportions and is now nearing the critical European borderline of 3 percent of the GDP, the situation does seem to raise concerns.

What do figures show? Bulgaria’s principal trade partner are the countries of the EU. Exports to them over the first 6 months of the year are up by 3 percent, whereas imports are up by close to 4. Which means that we are buying more from those countries than we are able to sell, with the gap amounting to close to EUR 1.2 billion. The EU countries Bulgaria has the most energetic trade relations with are Germany, Italy, Romania, Greece, France and Belgium. But Bulgaria also trades with countries outside the EU. And it is here that we see the biggest collapse in exports which are down by 12 whole percent; on the positive side imports are also down though by a mere 6 percent. The end result is also negative, upwards of EUR 1 billion. In this group of countries trade is most active with Turkey, Singapore, Russia, China, Macedonia and Serbia.

The main conclusion these figures lead us to is that Bulgarian commodities and services have not been finding a place on a sufficient number of world markets, that the Bulgarian economy is highly dependent on imports and that the gap between revenues and expenditures in foreign trade will sooner or later have to be compensated and the accounts balanced.

The problem is rooted in the fact that Bulgarian-made commodities are not competitive and that Bulgaria’s exports have a low added value. The fact is that this country continues to export mostly raw materials or goods with a low degree of processing i.e. commodities that do not bring in high profits. It is no coincidence that animal and plant fats, oils and wax account for the biggest share of the country’s exports to the EU in the first six months of 2014, compared to the same period of last year. Imports are dominated by consumer goods which, once consumed, stop generating revenues. Besides them we import sizeable amounts of high-tech goods, with an insignificant part of them earmarked for investments. It is precisely for this reason that in imports from the EU, miscellaneous manufactured articles feature most prominently. The same holds good of imports from third countries, where this same sector accounts for the biggest increase, close to 20 percent.

All this leads to the conclusion that Bulgaria is in dire need of investments in industry and the infrastructure – both local and foreign – that will help modernize it, improve efficiency and alter the imports-exports structure towards high tech and added value.

English Milena Daynova