Future of the Bulgarian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2023

Table of Contents

1. Introduction 6

1.1. What is this Report About? 6

1.2. Definitions 6

1.3. Summary Methodology 8

1.4. About GlobalData 9

2. Executive Summary 10

3. Market Attractiveness and Emerging Opportunities 11

3.1. Current Market Scenario 12

3.1.1. Military Fleet Size 12

3.1.2. Procurement Programs 15

3.1.3. Key Drivers and Challenges 16

3.2. Defense Market Size Historical and Forecast 17

3.2.1. Bulgarian defense budget to grow at a forecast-period CAGR of

9.34% 17

3.2.2. The country’s participation in peacekeeping missions and modernization plans to meet NATO standards will boost defense expenditure 19

3.2.3. Bulgaria’s defense expenditure as a percentage of GDP is projected to increase over the forecast period 20

3.3. Analysis of Defense Budget Allocation 22

3.3.1. Capital expenditure will increase over the forecast period 22

3.3.2. Capital expenditure is anticipated to record a forecast-period CAGR of

4.56% 24

3.3.3. Per capita defense expenditure to rise over the forecast period 26

3.4. Homeland Security Market Size and Forecast 27

3.4.1. Homeland security expenditure will post a forecast-period CAGR of

2.9% 27

3.4.2. Cybercrime and border control measures to drive the homeland security budget 29

3.4.3. Bulgaria falls under the “some risk” category on the terrorism index 30

3.4.4. Bulgaria faces some level threat from terrorist organizations 31

3.4.5. Bulgaria has a terrorism index score of

1.2 33

3.5. Benchmarking with Key Global Markets 34

3.5.1. Bulgaria’s defense budget expected to increase over the forecast period 34

3.5.2. Bulgaria’s military expenditure is limited compared to countries with the largest defense expenditures 36

3.5.3. The defense budget as a percentage of GDP is set to increase over the forecast period 37

3.6. Market Opportunities: Key Trends and Drivers 38

4. Defense Procurement Market Dynamics 39

4.1. Import Market Dynamics 40

4.1.1. Bulgaria recorded very limited imports during the historic period 40

4.2. Export Market Dynamics 41

4.2.1. Defense exports increased during the historic period 41

4.2.2. Iraq, Angola and Saudi Arabia were major arms recipients 42

4.2.3. Armored vehicles and artillery accounted for

88.0% of defense exports 43

5. Market Entry strategy 44

5.1. Market Regulation 44

5.1.1. Offsets are usually 70% indirect and 30% direct 44

5.1.2. FDI policies in Bulgaria 44

5.2. Market Entry Route 45

5.2.1. Budgeting process 45

5.2.2. Procurement Policy and Process 46

5.2.3. Joint ventures and engagement with local representatives provide attractive market entry routes 46

6. Competitive Landscape and Strategic Insights 47

6.1. Competitive Landscape Overview 47

7. Business Environment and Country Risk 48

7.1. Economic Performance 48

7.1.1. GDP Per Capita at Constant Prices (US$) 48

7.1.2. GDP at Current Prices (US$) 49

7.1.3. Exports of Goods and Services 50

7.1.4. Imports of Goods and Services 51

7.1.5. Gross National Disposable Income 52

7.1.6. LCU per US$ (Period Average) 53

7.1.7. Market Capitalization of Listed Companies 54

7.1.8. Market Capitalization of Listed Companies (% of GDP) 55

7.1.9. Government Cash Surplus/Deficit as a Percentage of GDP 56

7.1.10. Goods Exports as a Percentage of GDP 57

7.1.11. Goods Imports as a Percentage of GDP 58

7.1.12. Service Imports as a Percentage of GDP 59

7.1.13. Services Exports as a Percentage of GDP 60

7.1.14. Foreign Direct Investment (FDI), net (BoP, current US$ Billion) 61

7.1.15. Net FDI as a Percentage of GDP 62

7.1.16. Mining, Manufacturing, Utilities Output 63

8. Appendix 64

8.1. About GlobalData 64

8.2. Disclaimer 64

List of Tables

Table 1: Bulgarian Ground Forces Strength 12

Table 2: Bulgarian Air Force Strength 13

Table 3: Bulgarian Navy Strength 14

Table 4: Bulgarian Ongoing Development and Procurement Programs (US$ Million) 15

Table 5: Bulgarian Future Procurement Programs 15

Table 6: Bulgarian Defense Expenditure (BGN Million and US$ Million), 2014-2023 17

Table 7: Bulgarian GDP Growth and Defense Expenditure as a Percentage of GDP Growth (%), 2014-2023 20

Table 8: Bulgarian Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 22

Table 9: Bulgarian Defense Capital Expenditure (BGN Million & US$ Million), 2014-2023 24

Table 10: Bulgarian Per Capita Defense Expenditure (US$), 2014-2023 26

Table 11: Bulgarian Homeland Security Expenditure (BGN Million and US$ Million), 2014-2023 27

Table 12: Terrorism Index, 2018 31

Table 13: Benchmarking with Key Markets – 2014-2018 vs 2019-2023 34

Table 14: Top Bulgarian Defense Sectors by Value (US$ Million), 2018-2023 38

Table 15: Bulgarian Budget Process 45

Table 16: Bulgarian Procurement Process 46

Table 17: Bulgarian – Competitive Landscape of Defense Industry, 2018 47

List of Figures

Figure 1: Bulgarian Defense Expenditure (BGN Million), 2014-2023 18

Figure 2: Bulgarian Defense Expenditure (US$ Million), 2014-2023 18

Figure 3: Bulgarian GDP Growth and Defense Expenditure as a Percentage of GDP Growth (%), 2014-2023 21

Figure 4: Bulgarian Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 23

Figure 5: Bulgarian Defense Capital Expenditure (BGN Million), 2014-2023 25

Figure 6: Bulgarian Defense Capital Expenditure (US$ Million), 2014-2023 25

Figure 7: Bulgarian Per Capita Defense Expenditure (US$), 2014-2023 26

Figure 8: Bulgarian Homeland Security Expenditure (BGN Million), 2014-2023 28

Figure 9: Bulgarian Homeland Security Expenditure (US$ Million), 2014-2023 28

Figure 10: Terrorism Heat Map, 2018 30

Figure 11: Terrorism Index, 2018 33

Figure 12: Bulgaria – Benchmarked Against Key Markets (%), 2014-2018 vs. 2019-2023 35

Figure 13: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2018 and 2023 36

Figure 14: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018 37

Figure 15: Bulgarian Defense Imports (US$ Million), 2013-2017 (TIV Values*) 41

Figure 16: Bulgarian Defense Imports by Country (%), 2013-2017 42

Figure 17: Bulgarian Defense Imports by Category (%), 2013-2017 43

Figure 18: Bulgarian – GDP Per Capita at Constant Prices (US$), 2015-2025 48

Figure 19: Bulgarian – GDP at Current Prices (US$ Billion), 2015-2025 49

Figure 20: Bulgarian – Exports of Goods and Services (LCU Billion), 2005-2014 50

Figure 21: Bulgarian – Imports of Goods and Services (LCU Billion), 2005-2014 51

Figure 22: Bulgarian – Gross National Disposable Income (US$ Billion), 2005-2012 52

Figure 23: Bulgarian – LCU per US$, 2015-2024 53

Figure 24: Bulgarian – Market Capitalization of Listed Companies (US$ Billion), 2005-2012 54

Figure 25: Bulgarian – Market Capitalization of Listed Companies (% of GDP), 2005-2012 55

Figure 26: Bulgarian Government Cash Surplus/Deficit as a Percentage of GDP (LCU), 2005-2012 56

Figure 27: Bulgarian – Goods Exports as a Percentage of GDP, 2005-2014 57

Figure 28: Bulgarian – Goods Imports as a Percentage of GDP, 2005-2014 58

Figure 29: Bulgarian – Services Imports as a Percentage of GDP, 2005-2014 59

Figure 30: Bulgaria – Services Exports as a Percentage of GDP, 2005-2014 60

Figure 31: Bulgarian – FDI, Net (BoP, Current US$ Billion), 2005-2014 61

Figure 32: Bulgarian – Net FDI as a Percentage of GDP, 2005-2014 62

Figure 33: Bulgarian – Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014 63