Bulgaria has made significant economic strides over the past 15 years transforming into an upper-middle income country and a member of the European Union. Between 2000 and 2013, the country grew by 6% on average in per-capita Purchasing Power Parity (PPP) well above the European Union (EU) average of 2.4%.
The onset of the 2008 financial crisis, however, has had a significant and lasting effect on this growth putting the brakes on an investment boom that had buoyed growth in the country and requiring the development of new and bolder reforms to help the country navigate the new economic landscape in Europe and around the globe.
As the country continues down a path of reform, policymakers in Bulgaria are looking at ways to regain previous economic momentum and speed up growth in their efforts to achieve convergence with EU living standards.
One key area of focus, according to a new World Bank report, is productivity. The report, Productivity in Bulgaria: Trends and Options, looks at key areas for engagement to help the country return to stronger and sustained productivity growth a main driver of long-term economic growth.
According to Doerte Doemeland, World Bank Lead Economist and one of the authors of the report, “this mission is possible if Bulgaria invests in education and innovation, boosts its integration in the global markets, and strengthens its economic governance.”
“Bulgaria has success stories, like for example the development of Information Technologies and Communication (ITC) businesses, but more success stories are needed to further boost productivity,” concludes Doemeland.
The report identifies five priority areas of engagement to help bolster stagnating productivity in Bulgaria: education, innovation, regulatory certainty, competition, and the judiciary.
Improvements in these areas can help broaden skills among workers to better suit the needs of a rapidly changing global economy.
While no single reform or initiative is capable of returning Bulgaria to a path of strong economic growth on its own, collectively, the options put forth in this productivity report can go far in spurring the country toward faster and sustainable growth and economic prosperity.