site.bta2024 Wage Growth Highest in Restaurants and Transport, Slowing in ICT and Mining, Think-Tank Says

Income disparities in Bulgaria remained large in 2024, with a 3.6-fold gap between the highest-wage and lowest-wage sectors. But the pattern changed. Income growth was highest in relatively low-wage sectors where the shortage of employees was considerable and longstanding. In high-wage sectors, income growth was visibly slower, Institute for Market Economics (IME) senior economist Adrian Nikolov says in an analysis published on the IME website on February 28.

Nikolov notes that the staff income gap between economic sectors in 2024 played a key role in preserving the high share of the working poor and the high level of income inequality from previous years. In eight out of 19 economic activities, the average wage in 2024 was higher than the average wage in the whole Bulgarian economy. At BGN 2,378 per month, after considerable growth in recent years, the gross average wage in healthcare and social services came closest to the gross average wage in the whole economy, which was BGN 2,323.

Wages in the sector of information and communication technology (ICT) remained highest of all, the analysis says. In 2024, the average monthly wage in the sector reached BGN 5,280. The second-highest level of BGN 3,420 was recorded in finance and insurance. The considerable difference between the two sectors means that a shift at the top of the table is little likely in the near future.

The top-five list was completed by energy, professional activities and science (including service outsourcing), and the extractive industries, as was the case in earlier years. These three sectors generate high added value and have high requirements for worker skills. It should be noted that education and the civil service were quickly catching up with the top five by 2024.

Relatively low wages were registered, as usual, in the hotel and restaurant business (BGN 1,472 per month on average); agriculture, forestry and fisheries (BGN 1,636); and construction (BGN 1,830). We should bear in mind that these sectors show the highest levels of shadow practices on the labour market, and therefore it is not unlikely that employee incomes in these segments are underreported by official sources, the IME says.

The highest yearly wage growth was observed in hotels and restaurants, up by 20.95% in 2024 compared with 2023. This resulted from a severe shortage of labour in the sector after the COVID pandemic, combined with a high increase in output prices which outstripped inflation by far and enabled employers to raise staff wages. Another possible explanation is that some shadow practices were brought to light.

The transport, storage and postal services sector also saw a high increase in wages in 2024, by 18.66% compared with 2023. This can be explained with a continuing shortage of drivers in Bulgaria and EU-wide and an expansion of logistical activities in trade.

The rise of the average wage in construction (17.45%) was linked to that in real estate (17.75%) and reflects the expansion in housing construction in the capital Sofia and other large cities. The expansion put construction and related occupations at the top of the ranking in terms of unsatisfied demand for labour, as revealed by the Employment Agency's latest poll among employers.

More modest wage growth in 2024 compared with 2023 was reported in several sectors where the increase had been more rapid in previous years. The extracting industries saw zero growth, energy had 4.27%, and ICT had 6.31%. In the case of ICT, the main reason for the lower wage growth was a significantly shrinking demand for employees over the last year and a half and a global rearrangement in this segment of the labour market.

While income dynamics during and shortly after the COVID pandemic were driven mainly by the policy of the government and the lockdowns, more recently the dominant forces were high inflation and price effects in agriculture and energy. As the Bulgarian economy normalized in 2024, wage changes began to be propelled by market conditions and general demographic developments (growing demand for workers in such sectors as tourism and construction, and lower demand and higher supply of personnel in ICT). But income discrepancies remained large, and the prospect of low-wage sectors catching up with high-wage sectors seems very distant, the analysis concludes.