OECD ECONOMIC SURVEY
OF BULGARIA
Stepping up convergence
Sofia 4 April 2023
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The Bulgarian economy has been converging to
OECD countries
Income per capita
Source: OECD Economic Outlook database.
2
Bulgaria’s robust recovery has been interrupted by
the global energy crisis
Real GDP growth
Source: OECD Economic Outlook database.
3
Headline inflation appears to have peaked but
remains high
Harmonised index of consumer prices
Source: National Statistical Institute.
4
Real compensation has continued to grow
Real compensation per worker, 2022, y-o-y change
Note: Compensation per employee, total economy, deflated using the personal consumption expenditure deflator.
5
Source: OECD calculations based on the OECD Economic Outlook database.
Unemployment is low overall, but higher for
young people
Unemployment rate
Source: OECD Economic Outlook database and Eurostat.
6
After slowing this year, the economy will rebound
in 2024
Economic projections
2022 2023 2024
Real GDP growth (%) 3.4 1.9 3.2
Unemployment rate (%) 4.3 4.5 4.2
Annual CPI inflation* (%) 15.3 8.2 4.4
Fiscal balance* (% of GDP) -2.9 -3.0 -3.0
Source: OECD projections based on the OECD Economic Outlook database.
• Annual CPI inflation refers to the domestic index.
• Fiscal balance projections for 2023 and 2024 based on figures in the draft 2023 Budget as announced by the Ministry of
Finance. 7
The banking system is liquid and stable but close
monitoring is warranted
Liquidity coverage ratio, 2021
Source: European Central Bank.
8
Major medium- to long-term challenges
1. Meeting long-term spending needs
9
Social spending, notably to prevent poverty and
support labour market integration, should increase
Unemployment and social assistance benefits, 2019
Source: OECD Public Finance database.
10
Informal work should be reined in to put public
finances on a sustainable footing
Share of respondents answering ’yes’ to the question
Has your employer paid you any of your income in the last 12 months in cash and without
declaring it to tax or social security authorities?
Source: Eurobarometer 2019.
11
Half of all taxpayers are registered at the
minimum wage
Share of taxpayers by monthly income levels
Note: The distribution of taxpayers is based on income declared to the tax authorities.
Source: National Revenue Agency.
12
Trust in public authorities could be improved
Respondents with high trust in respective authorities, 2019
Triangles super hard to see.
Do we at all need them? If
you think so, please enlarge
them.
Source: Eurobarometer 2019.
13
The minimum wage is low, but increases need to
account for productivity
Gross monthly minimum wages in EUR PPPs, 2022
Note: For Bulgaria, minimum wages in nominal terms would be about 10% higher in 2023.
Source: Eurostat. 14
Market income inequalities remain high after
taxes and transfers
Gini coefficient, 2020
Source: Standardized World Income Inequality Database v9.4.
15
Major medium- to long-term challenges
2. Demographic challenges
16
The working-age population is shrinking
Share of population aged 15-64 to the total
Note: The method is based on the medium fertility variant. This takes into account the past experience of each country, while also reflecting uncertainty
about future changes based on the past experience of other countries under similar conditions.
Source: United Nations World Population Prospects 2022.
17
A high share of women are in management positions
Female share of employment in senior and middle management, 2020
Source: World Bank World Development Indicators database.
18
Quality childcare should become available
country-wide
Proportion of children aged 0-2 years enrolled in formal childcare, 2020
Source: OECD Family Database.
19
Net emigration needs to be contained
Emigration rate and immigration rate of citizens
to their own country of origin, average 2016-20
Source: Eurostat.
20
Many young and educated people could be brought
into work
Tertiary graduate shares by age group and by labour market status, 2021
Source: OECD calculations based on the National Statistical Institute 2021 Population Census.
21
Some of the people on disability benefits should
be reintegrated into labour market
Benefit schemes for persons with disabilities
Note: The “other” category comprises all disability benefit types not included in the other two categories. Average monthly benefit is in nominal terms.
Source: Ministry of Labour and Social Affairs of Bulgaria.
22
Major medium- to long-term challenges
3. Boosting productivity
23
An ambitious agenda of policy reforms would lift
productivity growth
Value added per hour worked, 2021
Source: OECD Economic Outlook database.
24
The use of EU funds should be accelerated
EU funds and national co-financing
Source: Ministry of Finance.
25
The insolvency regime needs to be simplified
Composite restrictiveness indicator
Note: Indicator composed of 13 sub-indicators, indicator values varying between 0 and 1, with higher values indicating greater
restrictiveness.
26
Source: OECD Insolvency Indicators database.
Most people of working age are secondary school
graduates
Highest educational attainment of 15-64 year olds, 2021
Source: Eurostat.
27
Corruption is perceived as high and needs to be
addressed further
Control of corruption
Scale: -2.5 (worst) to 2.5 (best), 2021
Note: Countries from the region and with similar income levels were selected as well as a well-performing country (Denmark).
Source: Transparency International.
28
Major medium- to long-term challenges
4. Accelerating the green transition
29
The reliance on fossil fuels could be reduced further
Total energy supply
Source: IEA World Energy Balances https://www.iea.org/data-and-statistics/data-product/world-energy-statistics-and-balances and
OECD Green Indicators database.
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