Bulgaria's macroeconomic indicators are very good

Budget deficit is 3% and unemployment rate is 5%, says Economy Minister Lachezar Borisov

Bulgarian Minister of Economy Lachezar Borisov

Bulgaria is among the few countries in which there is growth in consumption and rising incomes during the coronavirus crisis. This was stated by Minister of Economy Lachezar Borisov during the virtual Economist event entitled EU Recovery and Resilience Fund for Bulgaria's Transition: Innovation - Green Agenda - Digital Transformation. Bulgaria's public debt is among the lowest, the budget deficit for 2020 is 3%, and the unemployment rate in the country is 5% according to data by the National Statistical Institute and 7% according to data by the Employment Agency, he added.

Bulgaria's macroeconomic indicators are excellent, said Minister Borisov. Its credit rating was raised during the crisis, the country joined ERM II, and it implemented the most liberal measures with regard to the pandemic, combined with socio-economic measures, the economy minister added. In his words, balance between economy and health sector, synergy and lack of confrontation are key to tackling the current challenges. “This is the key - to work together,” the minister concluded.

“We are being criticised for not giving more money to businesses during the crisis, but in fact we have the most liberal measures towards businesses in the context of the Covid-19 pandemic. Only a few sectors were temporarily unable to operate,” Borisov stated. “Billions are available to transform Bulgaria and we must achieve a higher level of economic development. This will happen when we set higher goals,” he added, outlining as priorities innovation and growth, the circular economy, digitalisation, etc.

In his words, 95% of the companies which have already invested in the Bulgarian market have stated that they will invest again.

Bulgaria is the largest beneficiary of EU funds for the next programming period in terms of GDP, and this percentage is 10%, said Johannes Luebking, Principal Advisor, Recovery & Resilience Task Force (RECOVER) within the European Commission, during the event. He outlined as priorities restarting the economic growth and making the economy green and digital. According to him, accelerating the green transition in the current pandemic situation will present a successful policy with regards to recovery not only of the EU, but of Bulgaria in particular. Key areas for Bulgaria are decarbonisation, governance and public administration, as well as improving the environment.

According to Simeon Djankov, Former Deputy Prime Minister and Minister of Finance of Bulgaria, a senior fellow at the Peterson Institute for International Economics, 350,000 Bulgarian citizens have returned to Bulgaria due to the Covid-19 pandemic. In his words, this is human capital which our country needs and should try to retain. 60% of the returnees say that if they find a job within one year, they would stay in Bulgaria. Otherwise, they will emigrate again. According to Luebking, modernisation of the Bulgarian economy can help returnees remain in Bulgaria.

After the end of the pandemic, individual economies were expected to grow by 1% to 3.5%, stated Fabrizio Zarcone, Country Manager for Bulgaria, the Czech Republic, and Slovakia, Europe and Central Asia World Bank Group. According to him, Bulgaria will achieve growth in the upper limits of this interval - or about 3% - but the challenge remains for that growth to be long lasting.

Colin Ellis, Chief Credit Officer, EMEA - Moody's Investors Service, stressed that Bulgaria's credit rating had risen while most countries were worried about downgrades. He called for the country not to focus on the size of GDP, but on how the EU funds can be used to transform Bulgaria's economy.

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