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Ruse is among the stronger economies in Northern Bulgaria, but there are significant differences in the levels of economic development among the various municipalities within the region. As the main driver of local economies is manufacturing, the impact of the crisis on them is relatively limited, including in terms of the labor market, where the increase in unemployment since 2020 has been quickly corrected after returning to growth the following year. At the same time, the region faces a serious challenge regarding large inequalities in the local education systems, as well as worsening demographic indicators.

Industrial Leaders

The economies of the municipalities in the Ruse region are characterized by uneven levels of economic development. Several of them have significantly higher than the national average levels of value added per capita in 2020, while the rest lag far behind. According to the latest data, the leading municipality is Slivo Pole, with BGN 9,800 per person per year, surpassing the regional center Ruse (BGN 9,306 per person) for the first time. The reason for this is the substantial growth compared to the previous year. While Slivo Pole recorded a 14% increase in value-added, Ruse municipality saw a mere 0.8% growth. The municipalities of Vetovo and Byala also have relatively well-developed economies with annual growth rates of over 10%, but the remaining municipalities - Ivanovo, Dve Mogili, Borovo, and Tsenovo - have less than BGN 3,500 value added per person. Nominally, the largest local economy, with a total volume of BGN 1.45 billion, belongs to Ruse municipality, followed by Slivo Pole with BGN 96 million and Vetovo with BGN 78 million.

The backbone of the local economy in Ruse and the surrounding municipalities is manufacturing, including leading companies in the chemical industry, automotive production, and mining. The market leader in postal services, "Econt," also operates in the region, but overall, the leading service companies are concentrated in Ruse municipality. The strong industry places the region as a whole among the leaders in the country in terms of gross domestic product (GDP), with BGN 12,600 per person in 2020, although there has been a slight decline compared to the previous year. This, in turn, results in relatively high salaries and low poverty rates in Ruse.

Focused Investments

The significant presence of international capital in Ruse positions the region as one of the best in the country in terms of foreign direct investment, exceeding EUR 2.1 billion per person by the end of 2020. However, foreign-owned firms are highly concentrated in the regional center, with Ruse municipality accounting for EUR 341 million out of a total of EUR 445 million. In other words, the volume of foreign investments in the regional center amounts to EUR 2,200 per person. Data for the other municipalities, except Byala (where they amount to a mere EUR 87 per person), are confidential.

For this reason, the data on current investment activity presented through expenditures on the acquisition of long-term assets by non-financial enterprises are more indicative. Over the past two years, the most visible investment activity has been in Vetovo municipality, where expenditures for long-term assets reach BGN 2.6 billion per person, compared to BGN 2.1 billion per person in Slivo Pole and BGN 2 billion per person in the regional center. However, all municipalities, except Slivo Pole, have experienced a decline in investment expenditures in 2020 due to deteriorating economic conditions and increased uncertainty caused by the pandemic and the state of emergency.

The municipalities in the Ruse region are not particularly successful in attracting European funds. The only municipality that has surpassed the threshold of BGN 2,000 per person in total funding since the beginning of EU programs in Bulgaria by mid-2022 is the regional center. Most other municipalities within the region attract between BGN 500-700 per person, which is significantly below the national average level.

The Resilient Labor Market

Thanks to the industrial profile of the region (and the relatively small role of services, particularly tourism), the labor market in its municipalities remains relatively unaffected by the sharp decline during the pandemic year. The most significant decrease is observed in the share of employed individuals among the population aged 15 and above in economically active municipalities: a decrease of 3.4 percentage points between 2019 and 2020 in Ruse, and 1.6 in Slivo Pole. There are also significant differences in employment rates among the different municipalities. The share of employed individuals varies between 32% of the population aged 15 and above in the regional center to just 5.5% in the municipality of Tsenovo. These differences reflect both the overall job availability in different municipalities and the significantly greater choice.

According to the unemployment data published by the Employment Agency, 2021 was a year of recovery for regional labor markets in Ruse. The share of unemployed individuals among the working-age population decreased in all municipalities except Tsenovo, with most experiencing relatively rapid declines of 2-3 percentage points within a year. However, significant differences are also observed here. While the unemployment rate in the regional center was only 3.2% in 2021, it exceeded 10% in most municipalities and even reached 20% in Tsenovo and Vetovo. This suggests that the labor market challenges in the small municipalities of Ruse are not so much related to the short-term shock of the COVID crisis but rather the result of long-standing lower levels of economic development.

Weak Education

The future development of the labor market in Ruse largely depends on the output of the local education system and the skills accessible to future investors. However, the achievements of students in most municipalities do not provide much reason for optimism. Looking at the results of external assessments after the seventh grade, it becomes clear that only students in the municipality of Ruse manage to score more than 30 points out of a possible 100 in Bulgarian language and literature. There are also significant differences, typical for most municipalities in the country, in the results for mathematics, which are generally much lower. A similar pattern is observed in the high school graduation exams - it is striking that there are significant gaps between the results of several elite schools in the regional center and all the others. Some of the smaller municipalities in Ruse also face significant problems with student dropout rates, with Borovo having a dropout rate of 18% among students before the seventh grade, and Dve Mogili - 6%. Early dropout implies significant difficulties in accessing the labor market in the future.

Demographic Challenge

Similarly to other regions in Northern Bulgaria (excluding Varna), Ruse is facing extremely serious demographic challenges due to aging, migration out of the region, and low birth rates. In terms of natural population growth, the regional center performs the best, with a difference of 14.7 ‰ between birth and death rates in 2021, while in the municipalities of Ivanovo and Tsenovo, the indicator exceeds 30‰. In the past year, there has been a significant deterioration in natural population growth throughout the region (only a 5-point decrease in the Ruse municipality itself), primarily due to the peak in mortality as a result of the pandemic. Like other major economic centers, there has been a population outflow from the regional center to peripheral municipalities in 2020, with the Ruse municipality losing 1.3% of its population, while the largest growth occurred in Ivanovo (12%) and Slivo Pole (7%). However, in 2021, migration processes normalized and calmed down, with the regional center once again showing a positive balance of people leaving and settling within its territory.

Author: Adrian Nikolov

Each of the top 10 cities in Bulgaria has been losing population over the past 10 years. This is evident from the final data from the 2021 population census. Until now, it was known that the population was decreasing by over 800,000 people, but the breakdown by specific locations was missing. The latest data provides an opportunity to examine the development of the major cities, which concentrate a significant portion of the country's economic and social energy, as well as nearly 40% of the population. In this case, we set aside the view of regions and municipalities and focus specifically on the data for the cities. For the first time in the history of censuses, all major cities are losing population. In the period from 2011 to 2021, the top 10 cities in the country have lost over 6% of their population.

The ranking of the top 10 cities in Bulgaria can be divided into four groups. These are 1) the capital Sofia, clearly the largest city in the country and the only one with a population over 1 million people – this threshold was crossed back in the 1980s; 2) Plovdiv and Varna, which go together and maintain populations over 300,000 people – also since the 1980s; 3) Burgas, Ruse, and Stara Zagora, which continue to have populations clearly above 100,000 people; and 4) Pleven, Sliven, Dobrich, and Pernik, which have populations below 100,000 people and complete the top ten. Let's take a closer look at each of these groups.

The population of Sofia remains around 1.2 million people.

The first place is clear, as the 2021 census records a population in Sofia of nearly 1.2 million people. However, the data for Sofia reveals a surprising trend, as the population of the capital city is not increasing and even slightly decreasing (by around 20,000 people). This development is triggered by at least three factors. The first is the aging population in Bulgaria, which is now exerting pressure on the population in the largest cities downwards – even if young and active people are attracted, as is the case with Sofia, natural processes in the aging population begin to prevail. The second factor is related to the fact that the scale of mechanical growth in the capital has already diminished, meaning that the influx of population is not at the levels observed at the beginning of the century. The third factor is the Pandemic, which not only worsened natural population growth – with a high mortality rate in 2020 and 2021 – but also reversed migration processes. The major cities (including Sofia) experienced a population outflow toward their peripheries just before the census. This is true only for 2020, but it will take years of positive migration to restore the effect of the one-time correction during the pandemic. Apart from that, the decline in Sofia's population is not unprecedented – it also occurred during the period 1992-2001 when the censuses again recorded a decrease in the capital's population, mainly as a result of opening borders.

Plovdiv maintains the second position ahead of Varna, but both cities are losing population.

One of the big questions in this census was whether Varna could surpass Plovdiv and take the position of the second-largest city. The difference between the two cities in 2011 was extremely small – only 3-4 thousand people, creating expectations for a possible change in the ranking. Interestingly, up until now, Varna was the only city that consistently increased its population with each census, while Plovdiv failed to grow its population in several consecutive censuses. However, the 2021 census showed that both cities are losing population, with a magnitude of 18-24 thousand people, and Plovdiv remains in second place with a population of nearly 320,000 people compared to around 311,000 people in Varna. Despite both cities also attracting young and active people over the past 10 years, sustained negative natural processes, as well as the effects of the pandemic, including the outflow of people to the periphery in 2020, ultimately lead to a decline in population.

Burgas falls below 200,000 people, while Ruse and Stara Zagora are now within the range of 120,000-125,000 people.

The top six of our largest cities traditionally include Burgas, Ruse, and Stara Zagora - these are the six cities with a population of over 100,000 people in the country. After the 2021 census, Pleven is officially outside this category after over 40 years of being a city with a population of over 100,000 people. In its peak year (1985), Bulgaria had 10 leading cities with populations over 100,000 people - now only the top six cities remain. Among the three cities that complete the trio, Burgas shows a different trend. Until 2011, it was increasing its population, reaching over 200,000 people. However, now it is experiencing a decline due to a combination of the factors previously mentioned, and the population of the second-largest coastal city has fallen below 190,000 people. Ruse and Stara Zagora, on the other hand, continue to lose population at a significant rate, with declines of 11% and 17% over the past 10 years, respectively. By 2021, the population of both cities is below 125,000 people, with Ruse experiencing a more significant decline in population since the 1990s. This is in line with the challenging demographic trends observed in all Danube cities.

The top 10 is completed by Pleven, Sliven, Dobrich, and Pernik.

Pleven remains in the traditional seventh position but is now outside the 100,000+ population club. The city's population in 2021 is 92,000 people. After Pleven, some cities are similar in scale and proximity to most regional centers - Sliven (80,000 people), Dobrich (74,000 people), and Pernik (68,000 people). Pernik returns to the top 10 after an absence of around 40 years, surpassing Shumen by about 300 people. Haskovo is also very close to the top 10. The commonality among these cities is not just a decrease in population but the significant rate at which it is happening, with a loss of approximately 10-15% of their population over ten years. These cities not only experience a clear natural decline but also a mechanical outflow of population. While the first six cities have different examples, the cities outside the top six consistently lose young and active people over the years.

Migration is the litmus test for urban development.

The census data confirm the observation that Bulgarian cities are experiencing a significant and widespread population decline. It is difficult to speak of genuine socio-economic progress in the regions when even the largest cities in the country are consistently losing population. While natural processes are to some extent responsible due to the deteriorating age structure, migration processes are the ones that most clearly determine how attractive a city is, as well as its potential for development - whether in education, the economy, or the broader social sphere. Sofia, Plovdiv, and Varna are the three cities that, overall, have managed to attract people over the last ten years, excluding the pandemic's effect on the population outflow to peripheral areas in 2020. For the other cities, this process is either unsustainable or, in some cases, non-existent.

On the eve of the new academic year, it is time to look back at the results from the previous one. In this article, we focus on the grades from the National External Evaluation, which is mandatory for all seventh graders and includes exams in Bulgarian Language and Literature as well as Mathematics.

The data for the results of the external evaluation are available on the Open Data Portal, where the average grade for Bulgarian language and literature, as well as mathematics, is published for each school in the country, along with the number of students who took each of the two exams. The average grade for the two mandatory subjects is calculated as the average of the schools in it, weighted by the number of participating students. In this way, for example, the average grade of a school with 50 seventh graders would have 10 times the weight in the overall average for the municipality under consideration compared to a school with five students.

In 2022, a total of 58,567 students took the National External Evaluation for Bulgarian Language and Literature, with an average score of 53.63 out of 100. For mathematics, slightly fewer students took the exam - 58,349 - although both exams are mandatory. The average grade here, as usual, is significantly lower at 35.32 points. It is important to note that these results also include students from abroad, 21 in total.

The municipalities with the highest scores in Bulgarian language and literature are Borino (70.5 points), Varna (67.88 points), Nedelino (66.47 points), Zlatograd (66.17 points), and the capital city municipality (65.31 points). Large regional centers rank relatively high, where the higher competition among schools and the availability of more resources contribute to higher quality education. Very small municipalities perform the best, partly because each student has a significant weight in the final average grade. However, there are also significant differences in achievements between individual years in these municipalities, precisely because of the significant influence of individual students. Thus, a few excellent performances could send a municipality to the top of the ranking, while a few very weak performances could place it at the bottom. The municipalities with the lowest scores in Bulgarian language and literature are Novo Selo (9.19), Makresh (10), Chuprene and Madzharovo (12.80), and Nevestino (16.23), which are among the municipalities with the fewest participating students.

The results in mathematics resemble those in the Bulgarian Language and Literature, with very small municipalities at the top and bottom of the ranking, while large regional centers perform relatively well. Once again, the municipality of Borino takes the first position with 64.03 points, followed by Banite (61.23), Zlatograd (54.24), Varna (50.08), and Tsenovo (49.21). The capital municipality ranks seventh with 47.33 points. At the bottom of the mathematics ranking are Georgi Damyanovo (9 points), Borovo (9.02), Yakimovo (9.96), Kovachevtsi (10), and Tran (10.97), with none of these municipalities having more than 30 students participating. Regarding clusters with relatively high mathematics scores, they can be observed in the municipalities of the Smolyan region, which is characterized by a well-developed educational system, as well as in the Srednogorie region.

In 2022, the trend persists in almost all municipalities in the country that the grades for Bulgarian language and literature are significantly higher than those for mathematics, with only 10 municipalities showing the opposite result, compared to 15 municipalities in the previous external evaluation. However, the average difference slightly widens, with a 15.7-point advantage for the Bulgarian language compared to a 14.1-point advantage the previous year. This mainly reflects the increase in the number of municipalities with extreme differences between the results of the two subjects - there are already 87 municipalities with a difference of over 20 points, compared to 58 municipalities in 2021. This dynamic is partly dictated by the differences in the content of the exams between individual years, which do not guarantee comparability and fully equivalent levels of difficulty.

The dynamics of the results compared to the previous year are diverse. Improvement in mathematics grades is observed in 116 municipalities, while in Bulgarian language and literature, improvement is seen in 81 municipalities. All municipalities with extreme differences - both positive and negative - are very small municipalities where the influence of individual students is significant. The results are relatively stable in the largest municipalities - there is no change in the average number of points for Bulgarian language and literature in the capital city, while there is a decrease of 3 points in mathematics. At the same time, Plovdiv registers a slight increase in Bulgarian Language and Literature results and a decrease in mathematics, while Varna experiences a decrease by one point on both exams.

Unlike previous years, in the 2021/22 academic year, there is no officially published scale for equating the scores of external assessments to the standard six-point grading system. However, if we use the newly introduced standard for assessing maturity exams after the 12th grade and external assessment after the fourth grade, students would need 30 points to achieve a grade of Average (3) and pass the external assessment successfully. The average score for the Bulgarian language and literature exam in 52 municipalities falls below this threshold, while in mathematics, the results in a total of 181 municipalities would not reach the passing grade. Such equating highlights the problem that in over two-thirds of the municipalities in the country, the preparation in mathematics is insufficient, and the average result of the participating students is not enough to achieve a grade higher than Weak (2). On the other hand, if we apply the scale from the previous external assessment, which sets a significantly lower criterion, only 4 municipalities would fall below the passing grade for the Bulgarian language and literature exam, but for mathematics, as many as 29 municipalities would fall below the passing grade.

The significant differences between individual schools are also striking. 32 schools achieved an average score of over 80 points in the Bulgarian language and literature exam, while 489 out of a total of 1736 schools participating in the external assessment scored below 30 points. It is noteworthy that among the top 10 schools ranked by performance in the Bulgarian language and literature exam, six have a mathematical or science-mathematical profile, confirming the conclusion about the overall higher quality of education in these types of schools. The inequality is even greater in mathematics, with only 16 schools achieving an average score above 80 points, while more than half of them, a total of 1035 schools, scored below 30 points.

These results are a cause for serious concern. They indicate a significant concentration of quality mathematics education (and exact sciences in general) in a very small number of elite schools that achieve very high results, not only on national exams but also in international Olympiads. However, outside of these schools, the quality drops sharply, leading to a decrease in the number of students who are subsequently able to pursue education in fields that require more serious preparation in mathematics. From an economic development perspective, this circumstance hinders the potential for the development of several industries, especially in the ICT sector and the higher segment of industrial production, which have been among the main drivers of growth in the country in the last decade. Overcoming these inequalities and improving the overall quality of mathematical education on a mass scale will be among the most important challenges for future governance.

Less than a month from now, the new academic year begins, and a few weeks later, the next parliamentary elections will take place. All of this will inevitably raise questions once again about the quality of our educational system and what it provides for children and society. Unfortunately, the current facts do not speak well for the system, and there are no noticeable actions for real change.

We have already commented on the latest data on the average success in the Bulgarian language and literature matriculation exams by subject areas, but what is happening in individual schools? For some of them, the state matriculation exams prove to be a challenging obstacle:

• Out of the 950 schools in Bulgaria where students took the mandatory Bulgarian language and literature exam at the end of the 2021/2022 academic year, 307 (almost one-third) had an average student success below "Average" 3.00.
• A total of 6,455 children, or about 15% of all high school graduates in Bulgaria, studied in these schools.
• Out of these 307 schools, 189 were vocational high schools, 102 were general high schools, 14 were sports schools, and 2 were spiritual schools.
• In 27 schools, the average matriculation success is exactly "Weak" 2.00. This means that no student in these schools has passed the matriculation exam successfully and will not receive a high school diploma.
• The distribution of these 27 schools by type shows that 13 of them are general high schools, 13 are vocational high schools, and 1 is a sports school. In practice, the type of school does not matter.
• The distribution of schools by regions is presented in the graph below, with three schools in the Burgas, Plovdiv, and Pleven regions, and two schools in the Kyustendil, Pazardzhik, and Stara Zagora regions.

These are not the only schools with students receiving a "Weak" grade on the matriculation exam. There are also such students in other schools, but in these 27 schools, not a single student has successfully passed the exam in their native language, and this is already a systemic problem. These schools, as well as the entire system, symbolize the failure of the state to provide any quality education for these children. If measures are to be taken, it is good to start with them, especially if this failure is not a one-time occurrence but repeats over time.

But what can be done?

The concept of education quality has been so overused in society that almost no one can come up with a meaningful idea of how to implement this concept in practice. Perhaps it should start with:

1) Setting clear, precise, and measurable goals for what we want to achieve. For example, to have no school like the 27 mentioned above, to achieve a certain average success for all students in the country, to minimize the overall proportion of weak grades, to achieve specific points in international educational assessments, and to minimize the dropout rate. The goals can be different, but they need to be based on public consensus. 

2) Measuring the results according to the set goals. Matriculation exams may not be a sufficient measure of quality. Maybe there is a need for more frequent or different forms of tracking? However, measurement is essential to identify the problem, and burying one's head in the sand certainly does not help.

3) It is also necessary to have a clear idea of the actions to be taken when there are signals of low quality. What will we do with schools that have weak results, and when can we afford to wait and for how long? Support mechanisms would work best when problems are identified as early as possible, and they can be diverse – support with teachers or other resources, specific funding, programs for training school management, staff, and students, and if necessary, individualized education and many others. There are enough educational experts in the country who can implement such programs in practice.

4) Funding based on results. This implicitly assumes that we will finance for "good" results, but politicians have conveniently overlooked the important fact of what to do if there are no such results at all. It often happens, and it is normal that significant resources need to be allocated for correction. In the case of, for example, the 27 schools mentioned above, it may turn out that we will invest more in low-quality schools. These are difficult questions with unclear answers, which should be discussed and resolved so as not to fail several more generations by promising them quality education in words alone.

In recent months, the focus of the economic debate has been on the rise in prices, and rightly so. Bulgaria has not seen consumer price index increases of over 10% on an annual basis in decades. This raises the question of whether wage dynamics and household incomes are outpacing price increases or, on the contrary, if we are witnessing real impoverishment. The published data for wages in the second quarter of 2022 allow for such a comparison, and the results are concerning, as inflation exceeds wage growth in almost all economic activities.

Firstly, significant wage disparities between different economic activities in the country persist. The highest wages in the second quarter were in the ICT sector (4206 BGN gross monthly), while the lowest were in the hotels and restaurants sector (1058 BGN). Quarterly, the average national wage increased by 125 BGN, reaching 1730 BGN gross, and most sectors of the economy clustered around or below the average value.

To assess whether wage growth surpasses inflation, we compare the dynamics of the average gross monthly wage on an annual basis for the last three months for which there are data available (May, June, and July 2022) with the change in the consumer price index on an annual basis for the same months. The difference between the two indicators allows us to evaluate whether real impoverishment is occurring, at least in terms of workers' incomes.

The comparison is not encouraging. The average annual wage growth in May and June is slower than that of consumer prices, with a mere 0.5 percentage point difference in April. Price increases exceed the average gross wage by 4 percentage points in May and by 3.2 points in June 2022. This could be interpreted as an acceleration of wage growth in response to high inflation, but we can only speak of a lasting trend in this direction after the publication of third-quarter data.

Among the different sectors of the Bulgarian economy, only trade and administrative and support activities demonstrate faster wage growth compared to inflation over the three months, while some other economic activities such as mining, culture and sports, hotels, and restaurants managed to exceed price increases in May but not in the remaining two months. Of concern is the fact that the healthcare sector, which has already faced serious staffing problems due to external labor market pressures, experienced the fastest decline in purchasing power during the second quarter. There is also a significant decline in the public administration sector and municipal services.

A similar trend is observed when comparing the dynamics of consumer prices and wages at the regional level. Only in one region of Bulgaria do wages grow faster than inflation - Sofia (region), with a difference of less than 1 percentage point in May and June. Pleven and Gabrovo also show relatively good performance. Meanwhile, in regions where wage growth significantly lags behind inflation - Kardzhali, Razgrad, Lovech - the difference exceeds 10 points in June.

The wage data for the second quarter only provide an initial glimpse into the reaction of the Bulgarian labor market and employers to the sharp change in economic conditions following the outbreak of the war and the sharp increase in consumer prices. It is not unlikely that we will see more significant wage increases in the coming months as employers try to maintain the purchasing power and standard of living of their employees.

It is important to note that the presented data here only pertain to workers' wages. A more comprehensive view of purchasing power will be provided by household income indicators, which include all other sources such as pensions, social assistance, and the like. Nevertheless, these initial and incomplete indications point to significant restrictions and even a decline in the purchasing power of workers.

Which municipalities have the lowest and highest local taxes? To answer this question, the Institute for Market Economics (IME) collects data on the rates of several key local taxes through applications under the Access to Public Information Act and additional online surveys related to the "Regional Profiles: Development Indicators" study. The specific taxes examined are:

- Tax on real estate - non-residential properties for legal entities

- Tax on the remunerative acquisition of property

- Tax on vehicles and light automobiles with power exceeding 74 kW up to 110 kW

- Annual patent tax for retail trade up to 100 sq.m. net commercial area of the facility

- Tax on taxi transportation of passengers

The interactive map below presents a composite index of the tax burden in the 265 municipalities in the country. The levels of the five observed local taxes are normalized and averaged for each municipality and placed on a scale from 0 to 100, where 0 represents the lowest permissible tax burden according to the law, and 100 represents the highest. The actual indices for each municipality fall within the limits of the two constructed virtual municipalities, applying respectively the highest and lowest permissible rates for all the taxes considered.

Interactive version of the map

The map allows us to easily see which municipalities impose the highest tax burden on their residents. Sozopol is the municipality with the highest index value - 80.3. It is followed by the Sofia Municipality, where, however, the tax burden is significantly lower (68.4). The next positions are mainly occupied by municipalities along the Black Sea coast with an index level above 60 - Varna (64.7), Primorsko (64.7), Plovdiv (63.8), Pomorie (63), Burgas (62.9), Tsarevo (60.9). The municipalities with the lowest taxes are Kaloianovo (19.4), Medkovets (19.5), and Breznik (20.4), and the regions with the lowest rates are Vidin and Montana.

Looking back in time, we can see how often taxes have changed over the years. The graph below shows all cases of changes in taxes on real estate for legal entities, remunerative acquisition of property, vehicles with power from 74 kW to 110 kW, as well as the patent tax for retail trade with an area of the commercial facility up to 100 sq.m. We see that local taxes are less likely to be changed in years of local elections, such as 2015 and 2019, as we have commented before. It is also notable that as the election year approaches, fewer municipalities are inclined to increase local taxes. Decreases in tax rates are much less common than increases, although they have become more frequent in recent years. Interestingly, in election years, very few municipalities ease the tax burden.

For this year, there are 57 cases of increased taxes and only 19 cases of decreased taxes, breaking the record of the highest number of decreased rates in the past two years. The most changes occur in the tax on real estate - 23 increases and 7 decreases. For the other rates, changes are significantly rarer - there are 14 increases for the tax on remunerative acquisition of property, 12 increases for the tax on vehicles, and 8 increases for the patent tax for retail trade. Decreases are 2, 6, and 4, respectively.

Despite the COVID-19 pandemic and the measures taken to support the healthcare system, the problems it faces are far from resolved. One of the significant obstacles to the proper functioning of the system is the availability of healthcare professionals, which has deteriorated in recent years.

For the "Regional Profiles: Development Indicators" project, the team at the Institute for Market Economics (IME) developed an index that assesses access to specialist doctors in different regions of the country. The index is based on data on the territorial distribution of 17 groups of specialist doctors as of the end of 2020, measured by the number of doctors of each specific specialty per population. The access assessment for each group in the individual regions represents the distance from the region with the widest access to doctors of that specific specialty, while the overall accessibility index (presented in Figure 1) represents the average value of the assessments for the individual regions.

Figure 1: Accessibility Index of Specialist Doctors by Regions in 2019-2021, lower is better

Source: National Statistical Institute (NSI), calculations by IME

According to the IME index in 2021, access to specialist doctors remains the easiest in Pleven. This can largely be explained by the presence of a large medical university in the regional center, while the region is not among the most populous. As expected, the capital city ranks second with its large number of specialized medical institutions. Similar access is observed in Plovdiv and Varna, while Sofia-Oblast also ranks among the top five. Outside of the leading regions, most regions have relatively similar index values. The most challenging access is evident in Dobrich, Kardzhali, and Yambol. Most regions share similar problems with access, most commonly observed in cardiology, obstetrics-gynecology, and psychiatry. Compared to the previous year, access to specialized doctors has worsened in most regions (a lower index value is better) compared to the previous year. Exceptions are Pleven, Vidin, Kyustendil, Lovech, and Yambol, where improvements are visible, but they are most prominent in Pleven. It is noteworthy that some of the largest cities, including the capital, Plovdiv, and Varna, have experienced a decline in the index over the past year, likely reflecting the opposite dynamics of doctor concentration due to the treatment of COVID-19. In 2021, access to specialists deteriorated most rapidly in Razgrad and Kardzhali.

Figure 2: Accessibility Index of Specialist Doctors by Specialties in 2019-2021, lower is better

Source: NSI, calculations by IME

Among the individual specialties, the smallest regional differences in access are observed among infectious disease specialists. However, this is primarily due to their small number – a total of 248 in the entire country, with only 39 in the capital and two in several regions. On the contrary, the most uneven distribution is found among the most common specialists. Out of 1,843 cardiologists, nearly five hundred are located in Sofia, while only 12 operate in the entire Targovishte region. Similar distribution patterns can be observed among obstetrician-gynecologists. An explanation for the differences in specialties may also be the varying workload of individual specialists, although this remains speculative due to the lack of available data. The distribution of hospital facilities, their prestige, and payment capabilities, as well as other factors, are also significant. In many specialties, a decline in the overall access index is observed in 2021, with the most notable trends seen among laboratory doctors, obstetrician-gynecologists, and neurologists. Conversely, access to ophthalmologists and internal medicine experts is improving rapidly.

Figure 3: Population per General Practitioner in the Regions, 2019-2022

Source: National Statistical Institute (NSI), calculations by IME

However, one can see a reversal of the trend among general practitioners, with improvements in access evident in several regions for the first time in a decade. The trend towards improving access is visible in some parts of the country, including those experiencing the greatest difficulties - Targovishte (+102 people per GP) and Silistra (+95 people per GP). Part of the explanation for the improvement of the indicator in some regions is also related to demographic processes and population decline. On the other hand, the most noticeable negative change occurs in Burgas, with 71 people per GP, as well as in Haskovo and Pernik. At this stage, it is too early to speak of a long-term trend toward improving access, as we are observing improvements within a one-year timeframe.

Significant differences between regions are also present, with Pleven once again being the leader with 1214 people per GP, while Kardzhali performs the weakest, with over 3 thousand people per GP. It is also noteworthy that the leading economic centers - Varna, Plovdiv, and the capital - are concentrated in the middle of the distribution, most likely due to population growth.

However, it should be noted that the data on access to doctors do not provide the complete picture of the quality of regional healthcare systems. Many other factors - from the available equipment in hospitals to the workload and qualification of individual doctors - determine how well they will manage patient treatment. Nevertheless, the deterioration in access to doctors, both specialists and general practitioners, is inevitably a sign of negative developments in the healthcare system.