Institute for Market Economics: Bulgarian Economy Sees Overall Revival in 2016, 2017 in Unison with Europe's Upsurge
Sofia, November 28 (BTA) - An overall revival of the Bulgarian economy is observed in 2016 and 2017, which is in unison with the upsurge in Europe. Sofia continues to have the strongest economy in the country. The regions of Gabrovo, Stara Zagora, Varna and Rousse also enjoy good economic indices, shows a study by the Institute for Market Economics (IME) on regional economic profiles, presented at a BTA-hosted news conference here on Tuesday.
The economists outlined the high flow of investments, which leads to new jobs, higher incomes and better standard of living, as characteristic for all regions with high economic growth. The regions of Pazardzhik, Sliven, Vidin, Silistra and Kurdzhali are on the opposite side of the economic growth spectrum and are all plagued by the lack of private investments.
The analysts report that regional disparities have been growing since 2014 and are revolving around 4.5 times between Sofia and Sliven, the richest and poorest regions in Bulgaria, said Denislava Nikolova of IME.
Economic growth reached 3.9 per cent last year and is projected to be around 4 per cent in 2017. There were 212,000 more employed persons in the third quarter of 2017, compared to the corresponding period of 2013, and have reached 3.225 million people. The employment rate among 15 to 64 year-olds is at the record-high 68.5 per cent.
Economic growth and the stable increasing of wages translate into higher household incomes and better living conditions in many regions. Despite that Bulgaria has the highest share of population living in material deprivation in the EU, this percentage has dropped from 34 per cent of the population in 2014 to 32 per cent a year later. The share of people living below the poverty line, however, has remained relatively stable in recent years at 21 to 23 per cent, despite the recent economic expansion.
There were some 145,000 newly employed people in South Bulgaria in the third quarter of this year, compared to a year earlier. Seventy per cent of new jobs in the country were opened in the city of Sofia and the regions of Sofia, Plovdiv and Stara Zagora. This is a stark difference from North Bulgaria, which has seen just 27,000 new jobs.
The foreign investments flowing into Sofia and tangible assets expenditures are close to double those seen in the rest of the country.
The local tax burden is traditionally higher in regions with relatively strong economies, such as Sofia, Varna and Bourgas. It is lower in underdeveloped regions, such as Vidin, Vratsa, Montana, Pernik and Silistra, IME said.
The deteriorating demographic situation in the country acts as a natural barrier for the Bulgarian economic growth potential. The true growth has failed to exceed 4 per cent annually over the past two and a half years, while recent analyses by the European Commission and the International Monetary Fund, which include Bulgaria, show that the economy has either reached or close to reaching its full potential.