One of the most important changes that occurred in the Bulgarian economy after the global financial crisis of 2008 is that economic growth in the country began to be driven by export production. A large part of the investments in our country goes to such enterprises at the expense of those intended for domestic consumption.
“It is well known that we are a country with an aging population and a small market. Therefore, there are few investments and the lack of rule of law further worsens our image,” said economist Evgeni Kanev in an interview with Radio Bulgaria. The poor investment climate created by the lack of rule of law, state incentives for foreign investors and others kept these investors to a minimum, but now this trend is reversing as the geopolitical environment has changed.”
Evidence of a positive change is also provided by the data available to the Bulgarian Investment Agency. Its executive director Mila Nenova informed about it for the period from January to September 2023, investments reach 3 billion and 100 million euros, i.e. 50% more than in the same period of the previous year, and the amount is expected to increase even more.
“Investments are made in various sectors, but mainly in manufacturing, the processing industry, the automotive industry, and serious investment in the energy sector. But the biggest growth is probably in the automotive industrywhich today represents almost 10% of the country’s total gross domestic product.”
Almost 80% of electric cars manufactured in Europe use spare parts produced here. Despite the many components for the automotive industry that we manufacture in Bulgaria, attracting a car assembly company to our country is still something that our country is working on.
Our geopolitical location, low debt and growing gross domestic product, the stability and innovation we offer attract foreign investors:
“Bulgaria is no longer a country with cheap labor. Compared to other European countries, it is very competitive. We already have highly trained staff and our vision is to attract high-tech companies that are export-oriented because we can offer competitive conditions.”
The executive director of the Investment Agency also drew attention to a seemingly small detail of the conditions for investing here, which, however, turns out to be highly valued by foreigners:
“That’s important to them too Bulgaria is a peaceful and safe country. They often come with their families and it is important for them that their children have a good education, sufficient quality health care and services.”
Mila Nenova believes that the prevailing idea in society that foreign investors export a large part of their profits abroad is incorrect.
“Many companies, even if they have foreign capital, cannot afford to take all their profits abroad. Modern technologies require constant investment in the renewal of their capabilities, therefore a large number of companies invest seriously and continuously in our country, and this ensures the security and development of the regions.
The problem of labor recruitment and the demographic crisis the situation the country is in are factors that the Organization is aware of, but recognizes that there are good examples that have the potential to retain young people in our country:
“In order to stay in the country, a young person must make a decision based on reliable information. If he is not sufficiently aware of the alternatives offered to him here, he cannot make the right decision. Bulgaria has excellent industries, businesses and salaries are serious. Enterprises with high technology and high added value are very successful. Our country produces nanosatellites, commercial drones and more.”
A study by the Bulgarian Chamber of Commerce on the business climate in 2023 shows that 62% of managers complain about excessive government regulations, 61% of businesses are not satisfied with frequent changes in regulations, and 59% say that corruption is the main obstacle to investment and business development. According to Mila Nenová, these data are probably based on a subjective feeling on the part of the store:
“Private entrepreneurs always have high expectations for economic efficiency and they have the right to demand them, but the state behaves according to its rules so that public funds are used in the most correct way,” said the executive director of the Investment Agency. “Sometimes it is a fact that some procedures take more time, which of course leaves room for improving the work of the administration.”
Source: Bulgarian Radio