Regional Profiles: Indicators of Development (2018)
For the seventh year in a row, the Institute for Market Economics presents the study “Regional profiles: Indicators for Development” – the only comprehensive yearbook on Bulgarian regional development. The Regional profiles, as the study is better known, has become an indisputable trademark of the IME.
Thanks to the work of the institutions gathering and providing statistical data, every year the study includes more recent and more comprehensive information on the economic and social conditions in the country’s regions. The majority of data included in the current editions are for 2017. There are a few exceptions for data that are published with a delay longer than a year – regional data for GDP per capita and wages, as well as some indicators concerning investment, the environment, infrastructure and education. The analysis also includes some data for 2018 (in the field of administration, local taxation and matriculation exam results) where such were available in the middle of 2018.
This publication can be used both by the central and local authorities, businesses and the media, as well as educations, experts and representatives of the non-governmental sectors who deal with regional development. We believe that it would be interesting for everyone to check how his region is doing compared to others in the separate fields of economic and social life.
In 2016-2017 Bulgaria’s economy has increased its growth to about 4% annually, as all regions showed increases in the standard of living and economic wellbeing as measured by gross domestic product per capita, wages of the employed and household income. While in the previous years of the economic recovery following the 2009 recession the positive processes took place only in parts of the country, in the past two years economic developments has taken over the territory of the entire country.
Some regions, however, do have visibly faster growth rate sin all of the aforementioned indicators, mostly as a result of booming local economies and catch-up growth of wages and income. Such a local “economic tiger” in the last edition of our study in Plovdiv region, which has a 10% growth of GDP per capita and 9% growth in wages in 2016 alone. Given that incomes in the region grew by 16% in 2017, it is highly likely that that year was also very good for the local economy. Other regions with relatively high GDP per capita growth in 2016 were the strong economic centres of Burgas and Stara Zagora, as well as the smaller, but quickly catching up economies of Pernik, Lovech, Targovishte, Razgrad and Gabrovo.
The growth of household income and spending led to improvements in almost all regions in the primary absolute poverty indicator – the share of people living in material deprivation.
Good economic growth also went hand in hand with improvements in the labour market in most regions. Even more – 2017 had record employment rates in the economically active population (ages between 15 and 64) in most regions. Employment is about 70% for that cohort on average in Bulgaria, and well above 70% for the strongest economic centres, like Sofia, Plovdiv and Stara Zagora.In most regions unemployment is also approaching the record lows of 2008, but there still remain regions where the coefficient is in the double digits – evidence of serious structural problems of local labour markets, low population mobility and even statistical inadequacies of regional data. Almost all regions with unemployed rates above 10% (in the 10-64 age group) are located in North Bulgaria – Vidin, Vratsa, Pleven, Silistra, Targovishte, Shumen. The only ones in the South are Sliven and Smolyan.
The region’s abilities to attract local and foreign investment is a key driver of good economic development. Once more, the regions with growing foreign investment stocks per capita in 2016 are among the strongest economic centres – Sofia-capital and the wider Sofia region, Plovdiv, Burgas, Gabrovo, Ruse, as well as the lesser-developed Targovishte, where investments are bringing rapid growth of employment.
Unfortunately, developments in infrastructure, and particularly road infrastructure are not as positive. Despite the continued construction of new lots of highways currently under construction, the share of highways and first-class roads remains virtually unchanged. In the same time, the share of roads with good quality pavement has dropped in 2017 and is not below 40% of all roads, which points to problems in maintenance of the existing road system.
In 2017 the demographic conditions in the country continued to worsen as a result of low birth rates and migration. The regions with the fastest aging populations are the less developed ones, like Vidin, Kyustendil, Montana, Vratsa. Gabrovo is also among them; despite the fact that the region has one of the best rates of economic development in the past years, the age dependency ratio hits record lows every year, both for the region and in the country as a whole. In 2017, only six regions attracted more people than they lost – the capital, Plovdiv, Burgas, Varna, Pernik and Kardzali.
Education indicators continue to improve, albeit at a glacial pace. There is an increase in the school enrolment rates in the country, as well as (tiny) decrease in the number of school dropouts and class repeaters in primary and secondary education. Smolyan maintains its leading position as a result of the very high grades of local students on the matriculation exams and high rates of retention of students and teachers in the system of education. Sofia, Gabrovo, VelikoTarnovo, Varna and Blagoevgrad are among the regions scoring well in this category, while Sliven, Pazardzik, Yambol and Dobrich form the bottom of the ranking. The education system is performing poorly in the least developed regions in economic terms, and this is leading to a worsening structural unemployment and thus obstructing the development of the local labour market, the attraction of investment and the improvement of the population’s income.
The quality of healthcare on the local level is also important for human capital. Traditionally, Sofia and Pleven top this ranking. As a whole, in 2017 the provision of healthcare staff relative to the population remains constant in the country, but in some regions, such as Kardzali, Sliven, Targovishte, Silistra and Razgrad the shortage of medical personnel is significant. In the 207 there was also a decrease in the number of beds in multiprofile hospitals in the country. The limited relative number of doctors and beds in local hospitals forces the citizens of a number of regions to seek medical aid outside of their region. Such regions with significantly smaller numbers of patients are Dobrich, VelikoTarnovo, Pernik, Shumen and Yambol.
Good social environment also requires a high degree of security and an effective justice system at the local level. The workload of the police and regional courts of the larger and more developed regions however leave them in the last place in the raking, while in the smaller and less developed regions registered crimes are relatively few, and justice relatively swift.