SOFIA – Doubling and sustaining its economic growth rate for the next 15 years will allow Bulgaria to reach the average European income levels. This will require deep structural reforms that raise the potential for growth, strengthen inclusion and make progress on the green and digital transition. The country has followed sound macroeconomic policies in recent years and has weathered the Covid-19 economic crisis relatively well. However, pre-pandemic annual economic growth was only 2 percent on average for the last decade. And although incomes per capita reached 55 percent of the EU average in 2020 (in Purchasing Power Standard Terms), convergence in parts of the country has stalled.
These were the main topics discussed at the meeting held today between World Bank Group high level delegation and Bulgarian government. At the event were discussed four priority areas of collaboration that could help unlock Bulgaria’s growth potential:
· Upgrading institutions and improving good governance
· Boosting productivity, skills and employability for all
· Strengthening public spending for improved service delivery
· Enhancing the sustainability of the growth model.
World Bank representatives noted that targeted policies and programs addressing these areas need to have a strong focus on inclusion and should be coupled with greening investments both in physical infrastructure and human capital. In addition, policies need to address the impact of climate change to help unlock economic growth and limit losses due to natural disasters, including floods and storms, which are estimated to have cost the Bulgarian economy over $2 billion between 2000 and 2020.
“Bulgaria has the potential to rapidly accelerate growth while taking care of vulnerable people and the environment. Success should be measured by the services the government provides to its citizens, including the poorest, the quality of its institutions, and the sustainability of the economy,” said Gallina A. Vincelette, Director for the European Union Countries at the World Bank. “The World Bank stands ready to continue our close collaboration with Bulgaria by providing financing, advisory services and technical assistance to help unlock the country’s growth potential for the benefit of all in Bulgaria.”
The event follows on the meeting between World Bank Group President David Malpass and Prime Minister Kiril Petkov held in Washington, D.C. on May 9, 2022. Today’s discussions drew on an extensive body of analytical work prepared by the World Bank for Bulgaria, including the recent Systematic Country Diagnostic. The meeting also marks the beginning of the consultations with the Bulgarian Government in preparation of the forthcoming Country Partnership Framework, which will lay out the areas of future collaboration between the World Bank Group and Bulgaria. The new Partnership Framework is expected to be finalized in early 2023.