• © Nikolay Doychinov/AFP/Europress

    About the ILO in Bulgaria

    Slow growth, low incomes, high emigration rates

    After a lost decade of transition in the 1990s Bulgaria only made progress towards economic gains and shared prosperity in the 2000s based on growth rates of 6% per year. Some of these achievements were put at risk in the years after the Great Recession. Since 2015, the economy is again steadily growing at rates of close to 4 % per year. But the country is still lagging behind in terms of economic development. Income per capita is only 47% of the EU average, the lowest in the EU, while income inequality is the highest among all EU countries. At the current high growth rates it would take Bulgaria another 25 years to catch up with the average EU income.

    The high growth of recent years translated into improved labour market performance. Unemployment fell from its peaks in 2001 (20%) and 2013 (13%) to currently 5%. However, it should not be overseen that the relatively good labour market performance is also due to the demographic development of the country. The population fell from 9 million to 7.5 million in only 20 years (1990 to 2010). Emigration alone has contributed to a decline of the economically active population of 10%.

    Key future challenges of labour market and social policies are the insufficient coverage of the social protection system, labour shortages in certain sectors, skills mismatches, as well as high rates of inactivity among youth, Roma, low skilled workers, and rural population. Continue reading