Draft

SWOT ANALYSIS OF THE BULGARIAN ECONOMY

Strengths
- Stable macroeconomic environment and low direct taxes
- Reasonable and predictable fiscal policy
- High share of the population with secondary or higher education
- Highly qualified and educated researchers in the spheres of physics, computer technologies, biology,
chemistry, engineering sciences and medicine
- Relatively low unemployment rate
- Relatively small differences between male and female employment
- Traditions in the education of medical specialists
- Established social assistance and social inclusion system for the vulnerable groups
- Highly developed and dense transport infrastructure and high electrification rate for the railway
transport
- Well-developed water supply network covering 99% of the population and good quality of drinking
water
- Highly developed electricity distribution grid and good connections with the neighbouring countries
- Favourable climate and natural resources conducive to the development of agriculture and tourism
- Developed heavy industry
- Fast growing science-based economic sectors
- Rich cultural and historical heritage
- Relatively balanced regional development at NUTS II level
- Evenly spread urban network on the territory of the country
Weaknesses
- Unfavourable demographic trends
- Low quality of health services and thwarted access to them
- Obsolete and imbalanced health infrastructure
- Obsolete educational infrastructure and reduced quality of the educational system
- Large share of early school drop-out
- High level of poverty risk and considerable social problems
- Low incomes of the population
- Relatively low rate of economic activity for the working age population, high unemployment rate
among the youth and the discouraged people
- Low productivity and low efficiency of the economy
- Low participation rate in life-long learning formats
- Unsatisfactory condition and maintenance of the existing transport infrastructure
- Relatively small number of motorways in the republican road network
- High amortisation rate of the water supply networks and high water waste
- Insufficiently developed drinking and waste water treatment facilities
- Depreciated energy infrastructure and high energy losses in the transmission and distribution of
power
- Low R&D investments in the economy
- Lack of broadband Internet access in a significant part of the country and for a large part of the
population
- High dependency of the economy on imported resources and energy and low level of diversification
of the energy sources
- Lacking national policy in response to climate change
- Low energy efficiency of the economy and individual consumers
- The popular tourist product is oriented towards the low segment of the market
- Considerable regional disparities and discrepancies between the rural and urban areas
Opportunities
- Effective absorption of the EU Funds
- Bringing budget programmes and forecasts in line with strategic and human resources planning
- Improving the effectiveness of public expenditures and redistributing public resources to activities
which increase economic growth
- Developing and applying an effective system for monitoring policy and legislation implementation
- Promoting social partnerships and stimulating public dialogue
- Broader use of e-services
- Establishing a modern R&D infrastructure, increased implementation of the programme and project
funding
- Attracting direct foreign investments in science-based economic sectors
- Specialising in high-technology sectors employing highly qualified workforce
- Growing development of the financial engineering instruments and increasing the significance of
public-private partnerships
- Making use of the potential of the country for generating energy from hydroelectric stations
- Developing alternative tourism and new tourist products
- Establishing Bulgaria as a producer of bio agricultural products
Threats
- Slowed down economic development resulting from the unfavourable international situation
- Challenges for the stability of public finances relating to the ageing population, the potential energy
and/or financial and economic crisis
- Growing negative demographic trends and their increased negative impact on the labour market and
the social systems
- Difficulties in joining the labour market for the graduates due to the low quality of the educational
system
- Deteriorating health of the population
- Marginalisation of large social groups
- Shortages of well-qualified professors, scientists and medical specialists due to the low level of
attractiveness of those professions
- EU sanctions for failure to meet environmental requirements
- Risk of serious damages in case of natural disasters and emergencies due to poorly maintained
infrastructure
- Challenges resulting from climate change
- Significant increase in the food prices due to climate change and the expanding biofuel industry in
the world
- Significant increase in the prices of resources (including energy resources) and their share in the cost
of industrial products
- Bulgarian companies losing markets in Europe due to the growing competition from non-EU
countries
- Bulgarian tourist agencies losing markets due to increasing global competition among the tourist
destinations
- Growing intraregional and interregional disparities
- Depopulation of large areas of the country