The Bulgarian People's Republic implements a planned economy, the same as other member states of the Council for Mutual Economic Assistance. In the mid-1940s, when agricultural collectivization began, Bulgaria was still an agricultural country, with 80% of the country's population living in rural areas. Production institutions and facilities in all sectors of Bulgaria were nationalized, and the private economy gradually disappeared in Bulgaria. Although the collectivization policy caused many problems for other countries, the policy greatly increased agricultural productivity in Bulgaria. Large-scale mechanization increased labor productivity. In order to make up for the losses caused by artificially lowering the prices of consumer goods, the government spends a lot of money every year on this.
Stalinism during the Chervenkov era brought massive industrialization to the energy sector. During this period, the country built several dams, hydropower plants, chemical plants, and mining plants. The wartime economic system was abolished and the health care and education sectors were given room to grow. All of this relies on strict government control. Teams of workers from the labor camps and the Bulgarian Brigade Movement (a youth movement that called on young people to work voluntarily) took part in many of the construction jobs.
In the 1960s, Zhivkov implemented a series of economic reforms, which had a positive impact on the country. He focused on developing light industry, agriculture and tourism, including information technology, while retaining the planned economic model. Surplus agricultural products were allowed to be sold, making prices even lower, and the country also imported many new light industrial production equipment. Bulgaria was also the first socialist country to obtain a license from the Coca-Cola Company, which owns the Cyrillic trademark. Although Bulgaria's economy is relatively stable, it also suffers from a common problem of Eastern European socialist countries - trade is completely dependent on the Soviet Union, and planners do not consider whether some products have a consumer market. This has led to redundancies in some products and deficits in others.
In addition to the Soviet Union, Bulgaria's other trading partners include East Germany and Czechoslovakia. Some non-European countries, such as the Mongolian People's Republic and African countries are also large importers of Bulgarian products. The country also has good trade relations with some non-socialist countries, such as West Germany and Italy. In order to combat low-quality products, Bulgaria established a comprehensive national standards system in 1970, which included quality requirements for various products, machinery and buildings.
The GDP per capita of the Bulgarian People's Republic is relatively average among Eastern European countries (see table below). Data show that the purchasing power of the Bulgarian People's Republic is lower, mainly due to the greater availability of goods than in other socialist countries. According to official statistics, in 1988 almost 100% of residents had television sets in their homes; 95% of people owned radios; 96% of people owned refrigerators; and 40% of people owned cars.
GDP per capita (1990 $) 1950 1973 1989 1990 United States $9,561 $16,689 ? $23,214 Finland $4,253 $11,085 $16,676 $16,868 Austria $3,706 $11,235 $16,305 $16,881 Italy $3,502 $10,643 $15,650 $16,320 Czechoslovakia $3,501 $7,041 $8,729 $8,89 5 (Czech Republic) $7,762 (Slovakia) Soviet Union $2,834 $6,058 ? $6,871 Hungary $2,480 $5,596 $6,787 $6,471 Poland $2,447 $5,334 ? $5,115 Spain $2,397 $8,739 $11,752 $12,210 Portugal $2,069 $7,343 $10,355 $10,852 Greece $1,915 $7,655 $10,262 $9,904 Bulgaria $1,651 $5,284 $6,217 $5,552 Yugoslavia $1 ,585 $4,350 $5,917 $5,695 Romania $1,182 $3,477 $3,890 $3,525 Albania $1,101 $2,252 ? $2,482 Automotive Industry
Since 1965, many companies in Western Europe have chosen to build factories in Bulgaria to sell their cars in Eastern Europe. France's Renault and Citroen, Italy's Fiat and Alfa Romeo tried to establish cooperative relations with Bulgaria, but the Bulgarian People's Republic only reached an agreement with Renault and Fiat. "Bulgarrenault" (Bulgarrenault) produced cars based on the Renault 8 and Renault 10 from 1966 to 1971. The agency's factory is located in Plovdiv. Eventually they produced about 6,500 cars.