The Privatization Act was passed by the Bulgarian parliament in 1992, allowing privatization of state-owned enterprises (SOEs) to move forward. Since February 1993, when the first state-owned enterprise was privatized, privatization has slowly been gaining momentum in Bulgaria. Despite this progress, however, the environment in Bulgaria was anything but conducive to privatization until 1997. The economic and political situations were unstable, scaring off potential investors. High inflation, high interest rates, an unstable banking system, an undeveloped financial sector, and a volatile political environment were the rule.