Escaping the Stigma: Bulgaria's Bid to Shed Its 'Poorest' EU Status

Business » FINANCE | April 3, 2024, Wednesday // 16:10
Bulgaria: Escaping the Stigma: Bulgaria's Bid to Shed Its 'Poorest' EU Status Photo: Stella Ivanova

Bulgaria is on the brink of shedding its label as the "poorest" country in the European Union, with recent data revealing a promising trajectory towards economic convergence. Amidst discussions about Bulgaria's economic status within the EU, a closer examination of key indicators suggests a notable shift in the country's positioning.

One of the pivotal metrics indicating Bulgaria's progress is the gross domestic product (GDP) per capita at purchasing power parity (PPP), which reached 64% of the average European level in 2023. This figure, accounting for price differences across countries, offers a more accurate comparison. Despite being often labeled as the EU's poorest member state, Bulgaria's steady improvement in convergence indicators over the past two decades paints a different picture.

Despite facing economic downturns triggered by global and regional crises, including the 2009 global financial crisis and the recent COVID-19 pandemic, Bulgaria has consistently outperformed the EU average in terms of GDP growth. Notably, GDP per capita at PPP in Bulgaria has risen from below 40% before EU membership to 64% in 2023. Moreover, post-pandemic recovery efforts, coupled with population corrections, have propelled Bulgaria's economic growth, with the indicator improving by 9 percentage points in just three years.

While Bulgaria once lagged behind other Central and Eastern European (CEE) countries in terms of convergence, recent data suggests a narrowing gap. By 2023, Bulgaria's GDP per capita at PPP had reached 64%, bringing it closer to the CEE countries' range of 70-90% compared to the EU average. Notably, the comparison with Greece, which has seen a decline in convergence indicators, highlights Bulgaria's significant progress. Over the past two decades, Bulgaria has narrowed the gap with Greece from 60 percentage points to just 3 percentage points.

The shift towards economic convergence is particularly pertinent amidst ongoing political challenges and upcoming elections in Bulgaria. As the country navigates through political uncertainties, prioritizing macroeconomic stability and implementing growth-oriented reforms becomes paramount. Achieving sustained economic growth and closing the gap with other successful CEE countries should remain the primary focus for policymakers.

In summary, Bulgaria's journey towards economic convergence in the EU reflects a significant transformation, signaling a departure from its "poorest" country status. With continued efforts towards reform and growth, Bulgaria stands poised to break free from the constraints of its past and chart a new course towards prosperity within the European Union.

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Tags: Bulgaria, economic, European Union, GDP

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