Inefficient spending of money from the state budget, as well as the small size of the budget relative to the country’s gross domestic product (GDP), means that there is not enough money for key public systems and compromises the quality of public services.
This is written in the new Partnership Framework of the World Bank (WB) with Bulgaria for 2025-2029, which was discussed by the Board of Directors of the financial institution, notes “Trud”.
The demographic development of Bulgaria is widening the urban-rural divide, the bank’s analysis says.
The serious population decline due to emigration (due to the large differences between incomes in Bulgaria and other EU countries), poor infrastructure connectivity and suboptimal access to public services in many areas, especially rural and mountainous areas, led to the depopulation of entire areas.
In only two districts did the population increase in the period 2001-2022, and in seven districts there was a decline of more than 25%.
Bulgaria is the EU country with the greatest income inequality, and one of the reasons for this is the existence of a flat income tax, the SB states.
Bulgaria adheres to a small share of the budget compared to the country’s GDP.
This policy may need to be reviewed as the continued depopulation of rural areas has led to an increase in the number of small municipalities, which threatens to undermine the provision of public services in these areas, the WB said.
Access to health care is one of the areas where regional disparities are most evident.
The shortage of doctors in some areas will intensify as over 60% of GPs are aged over 55 and approaching retirement.
Bulgaria’s GDP increased rapidly in the years before and after joining the EU in 2007, but growth petered out after the 2008 global financial crisis, as foreign investment and the working-age population fell, and reforms lost momentum.
For comparison, for the period 2011-2019, the growth of the Romanian economy was more than twice as high as that of Bulgaria. A World Bank analysis shows that without reforms, Bulgaria’s GDP growth will decline to 1.25% by 2050 as the population continues to decline.
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