site.btaBulgarian Economy Remains Moderately Competitive - Annual Survey

Bulgarian Economy Remains Moderately Competitive - Annual Survey
Bulgarian Economy Remains Moderately Competitive - Annual Survey
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In the last 15 years, the Bulgarian economy, pulled by the EU, has been slowly recovering, but it is far from having reached its full potential, the Lausanne-based International Institute for Management Development (IMD) said in its 2022 World Competitiveness Yearbook, quoted by IMD's official partner for Bulgaria, the Center for the Study of Democracy (CSD). In 2022, Bulgaria placed 53rd out of 64 countries in the IMD World Competitiveness Ranking, keeping its position of 2021 and slipping five notches down of 2020 and fifteen down of 2009.

The Bulgarian economy remains among the least competitive ones in Europe, the survey showed. The stagnation of long-term competitiveness factors is particularly disturbing. Positive reforms or progress in the near future are little likely. This can change only through appropriate corrective measures in policy-making, national governance and business leadership, the CSD said.

Principal challenges to Bulgaria's competitiveness in 2022:

-- Geopolitical disruption and rising inflation, driven by energy costs;
-- Inconsistent energy and climate policies;
-- Confrontation between the Executive and the Judiciary;
-- Lack of credible anticorruption enforcement;
-- Limited investment in R&D and innovation.
Source: IMD World Competitiveness Yearbook and CSD, 2022

By 2022, the Bulgarian economy recovered almost completely from the economic impact of the COVID-19 pandemic, although businesses and households alike feel the adverse effects of rising energy costs. After Russia invaded Ukraine, the energy-intensive Bulgarian economy suffered from its energy dependence on Russia. Soaring energy prices and global supply chain disruptions pushed inflation to its highest levels of the last decade. The vulnerability of society, aggravated by the ongoing crisis, could potentially raise the poverty index and worsen the standard of living.

Although Bulgaria's competitiveness ranking is unchanged from last year, the Yearbook noted a slight improvement in most economic indices (14 indices out of 20). However, the IMD ranks Bulgaria considerably lower as regards the labour market (from 23rd to 46th) and public finance (from 21st to 38th).

Labour market conditions in Bulgaria have deteriorated over the last year. The unemployment level was steadied by the effects of the pandemic, and negative demographic processes are still observed: economic inactivity levels are high among people of working age, and the population is aging and shrinking rapidly. On a positive note, Bulgaria is still among the top 10 nations in terms of the size of remuneration for business managers and service sector experts and in terms of long-range labour force growth. A low corporation tax rate attracts foreign investors and global outsourcing.

Bulgaria continues to improve its competitiveness in international trade. In this area, the country places 19th out of 63. Although the EU remains its principal export partner, Bulgaria has achieved considerable growth in exports. In terms of international investments, however, the nation has dropped to 60th. It is essential for Bulgaria to try harder to attract foreign direct investment by improving its regulatory framework and offering suitable financial incentives to interested companies, the CSD said.

Many opportunities for upgrading infrastructure continue to open up for Bulgaria, especially in the technology sector and in vital subsectors of science and education. In all these areas, Bulgaria's ranking has improved somewhat in the Yearbook, but it still remains closer to the laggards' group.

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By 02:10 on 12.08.2022 Today`s news

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