Bulgaria is projected to experience a significant decrease in its labor force over the next decade, with estimates suggesting a reduction of more than 400,000 individuals. This decline is occurring amid rising labor costs, where Bulgaria ranks second in the European Union. According to Eurostat data from the second quarter of 2024, Bulgaria saw a 15.4% increase in hourly wages, while Croatia reported the highest rise at 17.6%, and Romania followed closely with 15%.

Lachezar Bogdanov, Chief Economist at the Institute for Market Economy, commented on the labor market dynamics, stating that the common labor market across Europe is functioning effectively. He noted that Eastern European countries, excluding Slovenia, have shown rapid growth rates that are twice the EU average. Over the past six years, wages in Bulgaria have doubled, yet this increase stems from a low initial base, which he described as a persistent issue.

Bogdanov highlighted several challenges facing Bulgarian businesses. He pointed out that the rise in labor costs comes alongside a projected decrease in the workforce. In the next 10 to 12 years, both the public and private sectors will need to adapt to operating with fewer employees, leveraging technology to maintain productivity. He emphasized the necessity for reforms to enable staff to utilize their qualifications effectively, suggesting that individuals with higher education should not be relegated to manual administrative tasks, but instead engage in work that truly requires their expertise.