The crisis and restrictions are shrinking the GDP of tourist areas
The economic disruptions caused by the Covid-19 restrictions have affected the various parts of the country in different ways. Data about regional GDP in Bulgaria for 2020 allow for assessing the effects of the pandemic through a single indicator. While most districts remained largely unaffected, those specialized in tourism marked a setback worth many years of growth.
In 2020, Sofia continues to generate almost half of the country’s GDP – 51,3 billion leva, followed by Plovdiv (9,7 billion leva) and Varna (7,4 billion leva). The smallest regional economic centers – Vidin and Silistra – mark outputs of 726 million leva and 892 million leva, respectively. In per capita terms, Sofia is again on top of the list with 38,9 thousand leva per person, which is twice the output per person of Sofia District (17,2 thousand leva) and Vratsa (15,6 thousand leva).
The long-term trend of regional GDP shows that in the past 20 years growth in the country occurred at different speeds. Expectedly, the capital city leads once more with an increase in GDP per capita of 557% between 2000 and 2020. Growth of 410-420% can be seen in Plovdiv, Sofia Province, and Kardzhali, where GDP rises due to local industry. While output in the first two provinces grows smoothly over time, Karzdzhali’s economy expanded rapidly in the past couple of years, driven by the newly opened gold mine in Krumovgrad. In most provinces GDP per capita grows more modestly – within the range of 250% to 350% for the last two decades. The effect of the 2020 crisis is the most pronounced in the long-term trend of Burgas, the economy of which marked the slowest growth up to 2020 – only 159%. This underwhelming performance is solely a result of the Covid-19 setback.
In 2020 most districts enjoy a mild increase in output per person. The common negative trend is driven by Burgas and Varna, which attract most of the tourists in the country during the summer. The annual decrease in Burgas amounts to 17%, while in Varna it is 5%. The more extreme contraction in Burgas is due to the higher intensity of tourism in the province in the years before the Pandemic. Moreover, the economy of Varna is more diversified, including other prominent sectors like manufacturing. Blagoevgrad, where winter tourism suffered from the first wave of restrictions, shows no change in GDP from 2019 to 2020.
One should mention that current GDP per capita data do not reflect the anticipated changes from the census from the end of 2021. Accounting for them would result in a convergence between provincial figures for GDP per capita. The lead of the capital will narrow down after updating the data on its population. Nevertheless, the conclusions from the 2020 data would not change much – the economies of the tourist regions carry the heaviest burden from the Covid-19 downturn, while those of the other provinces continue to grow, albeit more slowly.