At the beginning of 1991 the Bulgarian economy had almost reached the point of collapse. This was due to the economic policy of 1990, combined with the negative effects of the Persian Gulf crisis. These are the typical features of the state of our economy:
unprecedented decrease in production - minus 13 percent compared to 1990, total isolation from the world financial market, moratorium on the paying of foreign debt and the unfavorable attitudes of the private and official creditors, growing inflation, enormous inflationary expectations and deficits, headlong dolarization of the economy, scarcity of energy and raw materials, dissolving of the traditional foreign trade relations.