BULGARIA Trends and Developments Contributed by: Yordan Naydenov and Hristian Gueorguiev, Boyanov & Co.
ing a huge administrative burden on business in general, and logistics and transport foremost. Regrettably, the ongoing war in Ukraine con - tinues to have a profound negative impact on Bulgaria. Although the war’s direct effects, such as bombings, daily murders and large influxes of refugees, are not experienced in Bulgaria, its presence is felt daily. This includes the increased dissemination of Russian propaganda, the Rus - sian fifth column’s influence in all spheres of Bulgarian public life, and the constant unrest at the parliamentary and governmental lev - els. The uncertainty associated with conduct - ing large-scale business near such an intense military conflict persists. Despite it being three years since the war’s inception and the uncer - tainty concerning military aid to Ukraine from the USA, the initial optimism of 2023 evolved into moderate realism with pessimistic elements in 2024. Except for the note of optimism brought by peace talks, the prospect of which had been rumoured even before the coming to power of the new Trump administration, judging from the ongoing battle activities, the end of the war does not seem to be close, compelling us to continue living with its negative consequences and with the tension it generates. When discussing Bulgaria’s future develop - ment, its business environment and its potential for growth, it is essential to acknowledge other significant international elements that will play a pivotal role for Bulgaria, not necessarily in 2025 but over a longer term: • OECD membership: Bulgaria’s roadmap for OECD membership was established in June 2022, outlining the specific requirements and steps necessary for accession. OECD membership is widely expected to enhance economic growth, attract foreign investment
and elevate the country’s overall standard of living. • Recovery and Resilience Plan (RRP): Although the RRP was devised to mitigate the adverse effects of the COVID-19 pandemic, it encompasses broader goals aimed at stimu - lating economic growth and job creation. The RRP aligns with the EU’s sustainable devel - opment objectives, emphasising green and digital transformation. Investments will target energy efficiency, renewable energy sources, digitalisation of education and more. The RRP also seeks to reduce regional and social inequalities in Bulgaria through investments in education, healthcare, infrastructure, etc, in less developed regions, thereby enhanc - ing the competitiveness of the Bulgarian economy and improving the living standards of its citizens. The EU Recovery and Resil - ience Facility has allocated EUR6.3 billion to Bulgaria to achieve these goals. Sadly though, the European Commission has frozen its second disbursement from this fund due to Bulgaria’s delays in implementing key reforms. It should be noted that following an era of politi - cal instability marked by the failure of the par - liamentary represented political parties to form a stable, regular government, after a series of consecutive parliamentary elections and six caretaker governments, which came and went in the period 2021–2024, Bulgaria finally man - aged to form a regular government on 16 Janu - ary 2025. The new government’s efforts so far have been mainly directed at adopting the state budget in conformity with the eurozone criteria and dealing with related issues such as the tax and social security payments rate indexations. Another pertinent and regrettably ongoing issue, inherited from the previous era of instability, is the expeditious election of independent regu -
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