ulgaria's economy contracted dramatically after 1989 with the loss of the market of the Council for Mutual Economic Assistance's (COMECON) member |
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states, to which the Bulgarian economy had been closely tied to. The standard of living fell by about 40%, but it regained pre-1990 levels in June 2004. In addition, UN sanctions against Yugoslavia and Iraq took a heavy toll on the Bulgarian economy. The first signs of recovery emerged in 1994 when the GDP grew and inflation fell. During 1996, however, the economy collapsed due to lack of international economic support and an unstable banking system. The value of the Bulgarian Lev was fixed to the Deutschmark by the currency control board created in 1997; it is now linked to the Euro. Since then the country has been on the path to recovery, with GDP growing at a 4-5% rate, macroeconomic stability and European Union membership. |
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