Profile and Trajectory of Development of the Regions in Northern Bulgaria
During the week, as an addition to the new “Regional profiles 2020”, the IME conducted a focused discussion on the development of North Bulgaria. The entire conversation can be traced here, and the presentation is available here. An overview of the discussion can be read on the pages of Capital weekly newspaper (see here). On February 9th, 2021, the IME will conduct a discussion on the development of South Bulgaria as well.
A look at the North Bulgarian economies shows that the trajectory and the developmental models of the distinct regions differ. The clear leader in the Northeast, which besets the region’s indicators, is Varna, with GDP of 7.7 bln out of the 12.3 bln leva of the entire Northeastern region. Varna is also the only northern region, which has managed to attract people in the last decade. A combination of an influx of young and active citizens, a strong service sector, including traditional tourism, but also increasing number of digital companies, as well as developed industry, justify the good prospects for the spatial development of the marine capital.
In the Northern central region there is a particular polycentrism, as three districts - Ruse, Veliko Tarnovo and Gabrovo, define the development model. In the region as a whole, the role of manufacturing is greater than the national average. This is particularly evident in Gabrovo, where 45% of the gross value added is in industry. The services sector is progressing in all three districts, while the bigger Ruse and Veliko Tarnovo remain at the forefront. The better vertical integration of the three centers, and creating a link towards South Bulgaria is critical in the long-term development of the region.
While in the Northeastern and North central regions certain positive trends partly balance out the endemic problems, in the Northwest heavier challenges linger. In the context of the great demographic problem - depopulation and impaired age structure, the common tendency for inferior employment relative to the other regions, highlights these issues. In view of the size of the regional economies, and the figures purporting the gross value added, the developmental trajectory of the northwest will increasingly depend on the economies of Pleven and Vratza, and on the connectivity and the industrial progress of the wider periphery of the capital.
Although the country has seen substantial wage growth in all districts in recent years, regional differences persist. The Northeast region has the lead in salaries with higher wages in Varna city, as well as in the manufacturing sectors of municipalities in the near vicinity. We observe marked wage growth in the Northwestern and the North central regions, but in the former the effect of the nuclear power plant has to be accounted for, as it ‘weighs’ calculations of regional average.
Along with manufacturing, the development of digital services is key for Bulgaria’s economic growth. The Northeast features a continuous increase of the employed in the ICT sector, as Varna contests Plovdiv for the second place in digital services in the country, after Sofia. The bigger cities in the Northwest and North central region have also reported similar increases, albeit on a smaller scale. On the basis of the declared interest and expressed investment intentions, we can soon expect a more noticeable change in the North central region’s figures, especially in Ruse, Veliko Tarnovo and Gabrovo.