The Economic Trajectory of the Regions in Regional Profiles 2022
On November 16, 2022, the IME will present "Regional Profiles 2022." The examination of the gross domestic product (GDP) of the regions and the gross value added in different sectors of the economy highlights the differences between the north and south, as well as the distinct development trajectories of the regions in Bulgaria. In 2020, Sofia (the capital) had a GDP slightly above BGN 51 billion, which accounts for 43% of the country's total. In the south, the economy of Plovdiv (with a GDP of BGN 9.8 billion) stands out, traditionally contributing more than half of the gross product of the South-Central region. In the southeast, Stara Zagora (BGN 5.1 billion) temporarily surpasses Burgas (BGN 4.6 billion), which was hit especially hard by the pandemic. Combined, the economies of Stara Zagora and Burgas are practically equal to that of the Plovdiv region.
In the north, Varna (BGN 7.3 billion) remains an undisputed leader, despite experiencing a decline in the services sector during the pandemic. It maintains a strong industrial presence on the outskirts of the coastal city. The economy of Varna contributes slightly over a quarter of the gross product of the entire Northern Bulgaria. Veliko Tarnovo weathered the crisis relatively well and almost caught up with Ruse, both at levels around BGN 2.7 billion. These two regions have been competing in terms of economic scale for decades, with Ruse taking a slight lead in recent years. The smaller scale of economic centers in Northern Bulgaria, except for Varna, along with weaker interconnectivity between them, largely contributes to the difference between Northern and Southern Bulgaria.
The gross value added per person [1] across regions varies from nearly BGN 35,000 in Sofia (the capital) to just under BGN 8,000 in Silistra. Sofia's economy significantly differs from all others, being heavily dominated by the services sector, which accounts for 86% of the added value in the capital. Second in the country, with BGN 15,000 per person, is the Sofia region, encompassing industrial enterprises in the immediate outskirts of the capital, as well as a significant portion of mining and metallurgy in the Srednogorie region. Besides the capital and the industrial regions, Stara Zagora and Vratsa also play leading roles [2] in industry, with a high GDP per person of around 14,000-15,000 BGN, thanks to the high value-added created by energy companies. Another leader, besides the capital and industrial areas, is the Varna region, where the service sector prevails. Agriculture contributes over 10% of the added value in relatively smaller and poorer regions, mostly located in the northern part of the country.
"Regional Profiles 2022" clearly demonstrate that while the impact of the pandemic and the subsequent economic recovery is visible on the regional map, the existing significant differences between regions persist. Against the backdrop of prolonged political instability and entirely new economic challenges at the end of 2022, the development and unlocking of regional potential will be of immense importance. Local authorities need to be exceptionally active and work towards transforming their economies to achieve higher productivity and competitiveness. This includes attracting investments, developing industrial sites, collaborating with educational institutions, supporting investments in human capital, fostering regional partnerships, and thinking beyond conventional administrative boundaries. In these efforts, municipalities require support, particularly through tangible steps for financial decentralization and increased local resources.
To learn more about "Regional Profiles: Development Indicators 2022," please visit the website www.regionalprofiles.bg or attend the event organized by IME on November 16, 2022, at BTA.
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[1] The team at IME has calculated the gross value added per person based on the results of the population census. The official results indicate a population of just over 6.5 million people in the country in 2021.
[2] A relatively high share of the industry is observed in Gabrovo due to the traditions of the manufacturing industry, as well as in Kardzhali and Pazardzhik, where alongside the manufacturing industry, there are also successful enterprises in the mining industry, specifically in Krumovgrad and Panagyurishte, which showed good results in 2020.
