This is a summary of the main features of the Bulgarian economy after the Liberation in 1878. The economic history of Bulgaria can be divided into four main periods, each showing important changes. The first period, from 1878 to 1900, was crucial for laying the foundations of a modern economy.
From Liberation to the End of the Century (1878–1900)
Land Reform and Agriculture
After the Liberation, many landless Bulgarian peasants settled on land that had been abandoned by Turkish landlords, known as beys. The Bulgarian government paid compensation to the departing Turks. However, most of the capital left with the Turks, leaving little money for investment in the Bulgarian economy Bulgarias Economy Between 1920 and 1936.
In 1880, a law was passed giving peasants the right to own land if they farmed it for ten years and paid a fixed sum to the state. This law broke up the large estates and created a countryside full of small farms.
Agriculture began to modernize: farm machinery imports rose from 21 tons in 1882 to 138 tons in 1886, signaling the start of a money-based economy instead of a purely subsistence system.
Industrialization and Mechanization
Mechanization also spread to craft industries, helping factories produce more efficiently. However, high tariffs in foreign markets made it hard for Bulgarian industries to compete.
The government encouraged industrial growth after the unification of North and South Bulgaria by securing foreign loans. Between the 1880s and 1890s, the country built factories, railroads, harbors, and telecommunication lines. Machinery imports increased dramatically:
1882–1885: 300,000 leva per year
1891–1895: 6,482,000 leva per year
Banking, Trade, and Credit
The growth of credit institutions and joint-stock companies supported economic expansion. In 1887, there were only three joint-stock companies, but by 1889–1890, 42 new companies had been founded.
Foreign trade focused mainly on England, Austro-Hungary, and France. Western European goods often competed successfully with Bulgarian artisan and factory products. Initially, Bulgaria could not raise protective tariffs because of restrictions in the Treaty of Berlin Private Golfing Tour Turkey.
Government Policies and Protection of Industry
During the Stambolov government, laws were passed in 1894 to give Bulgarian industry preferential treatment. Later, the conservative Stoilov government taxed real estate instead of agricultural output, easing the burden on farmers.
By 1897, Bulgaria had negotiated new trade agreements, effectively breaking some of the Treaty of Berlin restrictions. These agreements created a tariff wall, protecting home-grown industry from foreign competition. The policies of Stambolov and Stoilov opened the way for further economic growth and modernization, laying the foundations of a modern Bulgarian economy.
Between 1878 and 1900, Bulgaria transformed from a largely agrarian, underdeveloped economy into a country with small farms, growing industry, mechanization, and expanding trade. Land reforms, new credit institutions, and protective tariffs allowed Bulgarian agriculture and industry to modernize, preparing the country for further economic development in the 20th century.
