The latest research of the Institute for Marketing Economics has established that economic growth has driven apart Bulgaria’s regions even more. After the certain slowing down of this process during the economic crisis in terms of welfare, the turning of the cycle vice versa to new growth resulted in a new episode of separation in 2014 – 2015. The difference between the richest region – Sofia-city and the poorest one – Sliven is around 4.5 times. The high investment flow is the basic difference between economically strong and weaker regions, as it feeds employment and income growth, thus resulting in a higher standard of living. Economic backwardness can be described with low investment flow, resulting in a troubled labor market, low incomes and high poverty rates.

The level of employment in Bulgaria reached 68.5% over the third trimester, exceeding even the pre-crisis level of 65%, but at uneven distribution. The greatest number of new jobs has been opened in South Bulgaria since the start of the year, as 70% of them are focused in the capital city, in the District of Sofia, in Plovdiv and Stara Zagora. There have been more new job openings in Plovdiv only over the past 12 months than across the whole of North Bulgaria.

The unemployment level dropped to 5.8% in the 3^rd trimester with the opening of new jobs. This however means that the available manpower ready to begin work has shrunk in numbers and as of this moment on the HR increasing will depend on the profile of economically inactive people. The latter form some free resource, but it still can’t be included into the labor market due to the lack of skills or for other reasons.

The positive labor market trends across the country also result in increased average wages by over 11% through the last trimester. At the same time only Sofia-based employees receive salaries exceeding the average ones. Only the cities of Pleven and Plovdiv show a trend for sustainable approaching of the average levels and the opposite trend is monitored in regions like Vidin, Silistra and Kyustendil due to low payment.

Sustainable growth of local taxes has also been monitored over the past couple of years, the Institute for Marketing Economics reports. It is due to the fact that despite the good economic development almost all municipalities have troubles in meeting their financial needs. That is why the institute strongly supports the old idea of local authorities, saying that the state should remise 20% of persons’ income tax to municipalities. Economy experts estimate that if this happens in 2018, additional EUR 324 mln. would enter the municipal treasuries, which would double their own tax resource, increasing the amount of money free for investments.

English version: Zhivko Stanchev