OECD Economic Surveys: Bulgaria 2023
Bulgaria’s convergence towards more advanced economies has continued but at a slower
pace. Soaring energy and food prices have pushed up inflation to its highest levels
in decades. However, support packages and strong momentum in wages and pensions have
stabilised purchasing power. With the currency board arrangement, the onus to decrease
short-term inflationary pressures is on fiscal policy. Fiscal discipline has resulted
in low public debt, but growing spending pressures related to ageing, infrastructure
and skills will need to be financed by greater tax collection efficiency and higher
environmental taxes. The fight against corruption, which imposes high transaction
costs, needs to continue by implementing more effective measures. Bulgaria’s climate
transition strategy is under development. Environmental taxes, including excise taxes
on fuels and carbon taxes on sectors outside of the emissions trading system need
to increase to curb energy intensity and reduce emissions. The shrinking number of
workers due to smaller young cohorts entering the labour market and outward migration
are undermining Bulgaria’s growth prospects and the sustainability of its social institutions.
Bulgaria needs to provide more support for families, including quality childcare country-wide,
and make staying in the country more attractive by raising productivity, fostering
the creation of good-quality formal jobs and reinforcing the social safety net.
SPECIAL FEATURE: BETTER JOBS AND INCOMES
Published on April 04, 2023 Latest available edition in: French
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