site.btaMedia Review: July 31

LABOUR MARKET SHIFT

According to a signed commentary in Capital.bg (“The Labour Market Is Beginning to Turn”), after several years of exceptionally strong demand for workers, Bulgaria's labour market is beginning to show signs of cooling. So far, these changes have translated into fewer job advertisements and weaker hiring demand across several key industries and major economic centres.

A sectoral breakdown of the decline largely points to developments in the high-tech services sector as the main driver. Compared with 2022, demand for workers has fallen by more than 60% in information technology, over 50% in human resources and research & development, and more than 35% in marketing and outsourcing.

Job advertisements have also decreased in the three industries with the largest number of vacancies - retail, tourism, and manufacturing.

Some occupations have seen moderate increases in job postings, including logistics, real estate, transport, energy, and certain segments of manufacturing, such as metallurgy, automotive production, and electronics. However, these increases are far from sufficient to offset the overall decline in demand for workers.

From a regional perspective, the decrease in job advertisements is almost universal, with the sharpest declines occurring in Bulgaria's largest labour markets.

Sofia, Varna, and Ruse have recorded the steepest declines in hiring demand, with job postings 20–25% below their 2022 peak. In other major economic centres, including Plovdiv, Stara Zagora, and Burgas, the decline has been between 10% and 15%.

The slowdown in labour demand has not yet had a visible impact on the overall condition of the labour market. On the contrary, Bulgaria continues to have historically low unemployment levels (the lowest in the EU), while employment has long surpassed the record levels reached in 2019, accompanied by rapid wage growth that has consistently exceeded inflation.

First, lower labour demand by definition means a slower pace of employment growth, especially against the backdrop of limited labour supply. There is also a significant likelihood of effects on wage growth. In recent years, the high-tech sector has been one of the main drivers of wage increases, particularly in the capital city, and its substantial decline means less pressure on employers to raise salaries.

More broadly, this could translate into a slowdown in consumer spending, which is currently one of the main engines of economic growth, and consequently lead to an overall moderation of economic expansion.

EMPLOYERS TURN TO FOREIGN LABOUR

Dnevnik.bg writes that between January and mid-July 2026, Bulgaria brought in as many workers from third countries as it did during the entire year of 2024, issuing around 35,000 work permits.

To put this figure into perspective, it represents about one-third of all unemployed people in Bulgaria, according to official data from the National Statistical Institute.

Traditionally, around 50% of all permits are issued for seasonal employment, mainly in the hospitality industry during the summer tourism season and in agriculture during the harvest period, according to data from the Employment Agency provided by the Ministry of Labour and Social Policy to Dnevnik.bg.

However, businesses point out that even in 2025, when the number of permits reached nearly 50,000, this represented only about 2% of the country's workforce. Only in sectors with particularly strong seasonal labour demand does the share exceed 10% during peak periods of the year.

“Even these higher estimates do not indicate a ‘takeover’ of the labour market,” said one of the country’s major employer organiZations, the Bulgarian Industrial Association.

Outside seasonal employment, residence and work permits have been issued since the beginning of the year to around 13,500 additional people in sectors including manufacturing, transport, warehousing and logistics services, culture, sports, entertainment, and education.

Just over 700 work permits have been issued for the construction sector, and approximately the same number have been granted under the so-called EU Blue Card scheme for highly qualified positions in the IT sector and telecommunications.

Around 400 permits have been issued for intra-company transfers, mainly in the extractive industries.

The largest share among third-country nationals admitted to the Bulgarian labour market comes from citizens of Uzbekistan, Nepal, Indonesia, Turkiye, and India.

Under current legislation, third-country nationals must be provided with working conditions and pay that are no less favourable than those offered to Bulgarian citizens performing the same or similar jobs.

The purpose of this requirement is to ensure that foreign workers coming to work in an EU country do not displace local workers by accepting lower wages.

According to the Bulgarian Industrial Association, foreign workers are not holding back wage growth. The organisation supports this claim by pointing to the continued increase in average gross wages, including in sectors with the highest concentration of seasonal foreign workers.

In addition, employers can hire third-country nationals only within certain limits. They cannot make up more than 20% of the average number of employees on the company payroll over the previous 12 months. For small and medium-sized enterprises, this threshold is higher, at up to 35%.

The number of issued work permits does not mean that the same number of foreign nationals have actually come to work in Bulgaria, the Bulgarian Industrial Association explains in an analysis.

A work permit does not equal a person actually occupying a job position.

The association explains that the data from the Employment Agency do not show how many of the approved foreign workers subsequently obtained visas, how many actually entered the country, and how many ultimately started working.

The organization calls for the creation of a unified information system that would link issued work permits with visas, entry into the country, the start of employment, and the termination of employment.

OMBUDSMAN CRITICISIZES LABOUR SERVICE RECORD CHANGES

In a Telegraf interview, Ombudsman Velislava Delcheva criticizes the changes, implemented by the government, in relation to the method for calculating the length of service, as well as the mechanism for determining the minimum wage.

“My most serious concerns are related to people who work part-time. Under the current system, a person who works four hours a day throughout an entire calendar year receives one full year of recognized employment service. Under the proposed model, the same person would receive approximately six months of recognized employment service.

This would affect parents of young children, people with permanent disabilities, students, pensioners, and everyone for whom part-time work is not a choice but the only opportunity to remain active in the labour market.

There are also a number of practical issues that still do not have clear answers, for example, how employment service will be calculated for people working under more than one employment contract, how the protection of already acquired rights will be guaranteed, and how the new system will affect other rights that legislation links to length of service.

Regarding the minimum wage, Delcheva also expressed reservations. Freezing the mechanism for determining it directly affects the lowest-paid workers. Moreover, at the same time, an increase in the minimum social security income thresholds is being proposed, which raises questions about the balance between income policy and social security policy.

For all these reasons, she insists that such changes should be considered separately, with a full impact assessment and broad public consultation.

Regarding the claim that the change will shrink the grey economy, Delcheva says that no impact assessment has been provided to demonstrate such an effect.

When undertaking one of the most significant reforms to the labour service record system in recent decades, decisions should be based on clear data and convincing arguments. The aim should be to both to combat unfair practices and ensure that the rights of legitimate workers and employees are not restricted.

KYIV-VARNA RAIL SERVICE FAILS TO LAUNCH

Sega.bg reports that Bulgaria, Romania, and Ukraine have been unable to reach an agreement on how to share the operating costs and what ticket prices to set for the planned passenger rail service on the Kyiv-Bucharest-Ruse-Varna route. This transpired from a written response by Bulgaria's Minister of Transport, Georgi Peev, to a parliamentary question submitted by MP Chilo Popov.

The international rail service was originally scheduled to begin this summer. The initiative was proposed by Ukraine, whose national railway reports that between 200,000 and 250,000 Ukrainian citizens travel to Bulgaria each year, with the highest passenger demand occurring during the summer season. For this reason, Kyiv has been seeking a direct railway connection to Bulgaria's Black Sea coast.

However, after the initial agreements, disagreements emerged at the level of the railway operators. For example, the Romanian railway authorities said that their participation in the project would only be possible if funding for the operation of the service is secured.

There is also no agreement on ticket prices. On the Bulgarian section of the route, the price of a second-class ticket has been set at EUR 24.80, excluding seat reservation, in accordance with the SCIC-EWT international fare system.

However, the Ukrainian side has requested at least a 30% reduction in the ticket price, citing the difficult economic conditions faced by Ukrainian citizens as a result of the ongoing war. Bulgarian State Railways (BDZ) cannot reduce the fare on its own unless the government compensates for the lost revenue, as international fare regulations are strictly governed and do not allow unilateral changes.

As a result, Bulgaria's Ministry of Transport prepared a proposal for the Council of Ministers to provide state support in the form of de minimis aid to cover the revenue lost from offering discounted fares to Ukrainian passengers. However, the proposal was not approved by the Ministry of Finance.
Meanwhile, the Ukrainian authorities have also sent a letter to the Romanian government, but have not yet received a response. As things stand, the project currently has little prospect of moving forward.

GOVERNMENT, PROSECUTION CLASH ON WATER UTILITY MISMANAGEMENT CASE

Mediapool.bg quotes Interior Minister Ivan Demerdzhiev as saying that a scheme for manipulating water meters was operating at the water utility in Burgas. Through this scheme, the company suffered losses amounting to millions of leva, which were allegedly redirected to parties’ slush funds.

His statement came after Prime Minister Rumen Radev criticized the prosecution for allegedly attempting to undermine the investigation into the case. Following his remarks, Prosecutor-General Vanya Stefanova announced that she had ordered an inspection.

According to Demerdzhiev, water meters at certain locations had been tampered with so that the official water bills appeared lower. However, the difference between the billed amount and the actual water consumption was allegedly paid in cash.

The Interior Minister said that the investigation by the General Directorate for Combating Organized Crime began on July 5 with the questioning of witnesses. Ten days later, Hristo Shirokov, a municipal councillor from Burgas and local leader of the Movement for Rights and Freedoms, was detained. After an interview, he was released.

However, the prosecution refused to request his 72-hour detention, a measure that is frequently applied in many other cases. There is information suggesting the involvement of a member of parliament who is also a former minister in the alleged scheme, but despite this, the prosecution has acted slowly. A supervising prosecutor was appointed only three weeks after the case materials were submitted.

“The slow actions of the Bulgarian prosecution represent a direct denial of justice. After such a long period, I assume that some witness statements may have been compromised because the suspects are free and have the opportunity to exert influence,” the Interior Minister said.

The delay occurred because the case was repeatedly moved between Sofia and Burgas.

Due to suspicions that a member of parliament was involved in the scheme, the materials were sent to the Sofia City Prosecutor’s Office, as it is the only authority competent to investigate such cases involving high-ranking officials.

However, prosecutors there found insufficient evidence of the involvement of a person with parliamentary immunity. As a result, the materials were returned to Burgas, where three prosecutors recused themselves from the case.

A supervising prosecutor was appointed only after the intervention and public reaction of the prime minister.

Prime Minister Radev mentioned the case before a Council of Ministers meeting on Wednesday. He said that the investigation had been suppressed and asked who the prosecutors’ employer was—the state or organized crime.

At this stage, two people have been charged in the case: Tsvetan Mirchev, the former head of water utility in Burgas, and an employee of the company. Both were released on bail.

250 COMPANIES LINKED TO POLITICIANS HAVE WON PUBLIC PROCUREMENT CONTRACTS

Companies linked to 250 politicians have won public procurement contracts over the past five years, said Bulgaria’s Minister of Innovation and Digital Transformation Ivan Vasilev, speaking on Bulgarian National Television.

The data emerged after a test launch of an upgraded version of SIGMA (Integrated System for Civic Monitoring and Analysis), which now has access to information from the Commercial Register. This allows the system to identify individuals and entities connected to companies that have won public procurement contracts.

The new version of SIGMA will become publicly available within a few days, once the remaining administrative obstacles are removed, Vasilev said. Among the politicians linked to companies are both former and current public officials, including municipal councillors, the minister noted. “This is not illegal, but is it ethical?” Vasilev asked.

He also stated that, from the initial launch of the system, it was found that over the past five years, more than 31% of public procurement contracts, worth over EUR 17 billion, were awarded through procedures in which there was only one bidder.

During the presentation of SIGMA in mid-June, Prime Minister Rumen Radev said that its launch marked the beginning of true transparency in public finances. Further upgrades to the system are planned.

The third version of SIGMA is expected to introduce stronger oversight of public procurement procedures and put an end to the practice of favouring certain companies by introducing restrictive selection criteria.

The fourth version is expected to include an automated check for inflated prices.

Regarding the conflict with parts of the technology sector, Vasilev said that he has been criticized by a small group of companies that have received BGN 800 million out of a total of BGN 1 billion allocated for developing software related to e-government.

According to him, the reason for their dissatisfaction is that they want to maintain exclusive access to public contracts, while his goal is to ensure greater competition.

Asked about administrative reform, Vasilev replied that all ministries are still working on proposals for changes aimed at removing unnecessary positions and improving efficiency. The stated objective is to achieve better results with fewer employees.

ROAD SAFETY

Sega.bg writes that Bulgaria ranks among the top three countries with the most dangerous roads in Europe for the second consecutive year and has moved up in this negative ranking. Referring tp to the latest annual study by Vignette Switzerland, a company specializing in the online sale of Swiss electronic motorway vignettes.

The country now ranks second, between two other Balkan nations - Serbia and Romania. Serbia remains the most dangerous country, with a total of 488 road fatalities recorded during the study period. This corresponds to 74 deaths per one million inhabitants, placing Serbia 72% above the current EU average for road fatalities. However, its latest road death figures represent a 19% improvement compared with the previous year.

Bulgaria follows closely in second place, with 71 road fatalities per one million inhabitants, or 456 deaths in total. This is 65% higher than the European Union average for road traffic fatalities, although the country has achieved a 36% improvement in this indicator compared with the previous year. Despite this progress, Bulgaria has moved from third to second place, replacing Romania in the ranking.

Nordic countries continue to rank as the safest in Europe. Norway has now caught up with Sweden, recording just 19 road fatalities per one million inhabitants, making the roads in these countries nearly four times safer than those in Serbia.

Lithuania has achieved the largest reduction in road fatalities, with a 43% decrease. Bulgaria, with a 36% reduction, also ranks among the top five countries for long-term progress in improving road safety for both drivers and pedestrians. The other countries in the top five are Latvia (37%), Greece (35%), and Hungary (30%).

At the other end of the spectrum is Portugal, where road fatalities have decreased by only 1% since 2015. France has also shown a slow pace of improvement, reducing road deaths by 6% over the same period.