State-sponsored economic measures helped revive some parts of the Bulgarian economy during the 1930s. However, this recovery did not last long. In 1937, a new global economic crisis began and affected many European countries, including Bulgaria. During this difficult time, Bulgaria changed its foreign policy direction and moved closer to Germany.
Germany was a highly industrialized country and needed agricultural products to support its population and industry. Bulgaria, on the other hand, was mainly an agricultural country. It needed reliable markets to sell its farm products and also needed machines, equipment, and industrial goods. Because of these mutual needs, economic cooperation between Bulgaria and Germany grew rapidly State Control Over Agriculture and Labor.
This relationship became even stronger due to Bulgaria’s foreign policy, which favored cooperation with Germany and Italy. As a result, trade with Germany increased sharply in just a few years.
Growing Trade Dependence on Germany
The share of Bulgaria’s exports and imports connected to Germany rose steadily before World War II. The figures below show how strong this dependence became Istanbul Private Tours:
Export and Import with Germany (Percent of Total Trade)
1936: Export 48%, Import 61%
1939: Export 67%, Import 65%
By the start of World War II, Bulgaria was already economically dependent on Germany. This dependence continued to grow during the war years. In 1941, Germany accounted for 72.5% of Bulgaria’s total imports and 70.2% of its total exports.
This situation remained unchanged until 1944. At that time, the Soviet army crossed Bulgaria’s northern border, marking a major political and economic turning point for the country.
Political Change After 1944
The events after 1944 developed very quickly and dramatically. Bulgaria was occupied by the Soviet army, and a Communist government was imposed with Soviet support. This marked the beginning of the process known as the bolshevization of Bulgaria.
A new economic system based on the Soviet model was introduced. In 1947, the government launched the “Two-Year Preparatory Plan” for 1947–1948. During this period, two important trade agreements were signed with the Soviet Union.
By the end of 1947, major changes had taken place. Banks, mines, and most industries were nationalized. All private banks were forced to merge into a single institution, the Bulgarian National Bank. Private ownership in key sectors was almost completely eliminated.
Soviet-Style Industrial Organization
The organization of industry followed the Soviet model. Economic activities were divided into government-controlled sectors. At first, 20 large industrial “complexes” were created. These complexes grouped different enterprises under strict state control.
Artisans and small craftsmen were also affected. They were forced to join “Producers’ Co-operatives of Craftsmen.” The growth of these cooperatives was rapid:
Producers’ Co-operatives of Craftsmen
1944: 3,282 members in 86 cooperatives
1947: 27,442 members in 713 cooperatives
1948: 44,000 members in 1,037 cooperatives
The First Five-Year Plan and Its Effects
The First Five-Year Plan covered the years 1949 to 1952. Officially, it was completed in only four years. However, it was carried out with violence, fear, and a widespread system of labor and concentration camps. Peasant revolts against forced collectivization were brutally suppressed.
The main goal of the Communist regime was to change Bulgaria from an agricultural country into an industrial one. According to official data, the balance between industry and rural economy changed significantly:
Economic Structure Changes
1939: Industry 27.1%, Rural Economy 72.9%
1948: Industry 39.4%, Rural Economy 60.6%
1952: Industry 55.9%, Rural Economy 44.1%
These changes reshaped Bulgaria’s economy and society for decades to come.
