Slowdown in investment and growth, pandemic, recession, rapid recovery, political instability, war in Ukraine, energy crisis in the Old Continent. Following in this order are the challenges that have changed the economic and social map of Bulgaria over the last decade.

The Institute for Market Economics presented its annual edition of “Regional Profiles: Indicators of Development” - a study that registers the state of the 28 regions in the country according to 68 indicators.

"In the last 4-5 years we have gone through some pretty tumultuous developments," economist Petar Ganev says. " We have had a lot of volatility in the economy, but at the same time the regional differences remained - the gap between big and small enterprises, between the capital and everyone else, between the North and the South."

• Bulgarian regions cannot develop at the same pace artificially

• There are three viable planning regions in Bulgaria

The expert cites the example of the economic centres in the south being larger in scale and having better connectivity, which gives them an upper hand over the north.

"The axis of Sofia, Plovdiv, Stara Zagora, Burgas - these are relatively strong and large centers that are well connected - continues Peter Ganev - While in the north this is not the case - there is only Varna and a few smaller centers. However, I see that there is potential there that can be developed.

• Industrial areas, EU funds and the need for administrative and tax reform

In Sofia, Plovdiv and Varna, many indicators are improving, including demographically, due to the influx of people coming for the universities and better job opportunities. The big question, however, is whether we will see this in some of the secondary centres such as Ruse, Veliko Tarnovo, Stara Zagora, where there is no such inflow of newcomers. Young people there still tend to go abroad or to the biggest cities."

• Unused opportunities in region of eastern Bulgaria

Almost every region is performing well in a given area, the institute's research shows. For example, education in Smolyan is at a good level, in Pleven - health care, in Sofia region - economic activity. And the second largest city in the country - Plovdiv, remains in the top positions in economic development, good education, employment and income, which is relatively high for the country.

The demographic situation is the biggest problem for all regions. The 2021 census confirms the trend of declining "human capital" - 20 of the regions have lost at least a fifth of their workforce.

• Perfect storm in Bulgaria’s Northwest – the least developed region in the EU

"Failure to adapt to a declining population continues to have a direct impact on the delivery of public services (education, health, policing, etc.) and on the ability of the private sector to hire labour," reads one of the study's conclusions.

And as Bulgaria may well face the New Year without a new budget due to the slim chance of having a regular cabinet, Petar Ganev highlights which social groups will suffer the most.

"The most affected will be the people who are waiting for the state to provide concrete solutions, those who are on minimum wage or on pensions," the economist says. - In the case of pensioners, however, if there are changes, they usually happen in July, so they are not necessarily among the most affected by this situation.  Even if we had an adequate budget, perhaps there would be no pension update from 1 January. However, for people on the minimum wage - in a regular cabinet and budget, their income would in all likelihood have been increased. So there are groups for whom it is certainly more advantageous to have a budget, to have stability. Including employers and trade unions, who prefer to have a ready framework within which to work."

Text: Diana Tsankova /interview by Antonia Popova, BNR Plovdiv/

English version: Elizabeth Radkova