Bulgaria has come a long way from one of the most dramatic and poverty-ridden transitions from socialism, to a market economy in the 1990s, to becoming a middle-income European Union member in 2007. The early 1990s were marked by political instability and slow reform, which resulted in the major macrofinancial crisis of 1996 and 1997, and a severe spike in the incidence of poverty. The postcrisis decades witnessed sustained growth and exemplary macroeconomic and financial stability, but incomes and living standards remained low. A new poverty spike in the aftermath of the global financial crisis of 2008 and governance loopholes stimulated a new political crisis in 2013.

During the 1980s, efficiency deterioration and worsening terms of trade had induced a 13 percent fall in industrial production. ...