In 2022, Bulgarian municipalities return to rapid economic growth

In 2021, the growth of municipal economies amid the recovery from the covid pandemic was highly uneven and concentrated in regions where tourism and agriculture play a leading role. In 2022, we already see almost universal growth, and the municipalities with decreases in value added on an annual basis are units.

In 2022, only 18 of the 265 municipalities in the country saw a decrease in the added value of factor costs of non-financial enterprises. It cannot be said that there is a visible territorial clustering of municipalities with negative economic dynamics. At the same time, there are municipalities with three-digit growth - Beloslav (676%) as a result of the revival in trade, Tryavna (387%), Breznik (320%) after the start of work of the new mine in the municipality. Strong growth was recorded in the economy of the Capital Municipality - 24% on an annual basis after being held in 2020 and 2021. The growth in the other large cities is similar - 19% in Varna, 17% in Plovdiv, 14% in Burgas and 13% in Ruse. When looking at the growth data, we should also keep in mind that the second half of 2022 is characterized by high inflation, which in turn means that the difference between the nominal (presented here) and the real growth of the municipal economies differs significantly. Considerable declines in many places in previous years should also be taken into account.

In 2022, the largest municipal economy remains that of Sofia, creating BGN 41 billion in added value. The top five are completed by Plovdiv (BGN 5.3 billion), Varna (BGN 4.4 billion), Burgas (BGN 2.3 billion) and Ruse (BGN 1.7 billion). The energy center Radnevo and Stara Zagora are also with over a billion added value, and Kazanlak and Pleven are also approaching this value. The number of municipalities with less than BGN 100 million added value decreased to 172 compared to 185 a year earlier. The smallest municipal economy in the country is that of Trekliano with only BGN 100,000 added value, and with less than BGN 1 million, only Chavdar remains.

The municipality with the highest added value per capita in 2022 is the Devnya industrial center with BGN 102 thousand. The top 5 is completed by Galabovo (BGN 55,000 per person), Sopot, the capital (with BGN 32,000 per person). It is important to note, however, that the data for most municipalities in Srednogorieto, Kozloduy, Radnevo and Krumovgrad are confidential, and they - thanks to their strong mining, processing or energy industries - would rank at the top. With less than BGN 1,000 per person in the population in 2022, 5 municipalities remain, with less than 5,000 – as many as 135, which once again demonstrates the concentration of a significant part of the economic activity in Bulgaria in relatively compact geographical areas.

The rapid recovery and return to growth of almost all municipalities in 2022 once again confirm the flexibility of the Bulgarian economy against the backdrop of the complex of crises it has faced since the beginning of the decade. However, after the pandemic, war and inflation, the great inequalities inside the country come to the fore - both according to the level and according to the trajectory of economic development. The regional map clearly shows the good examples – the big service centers, the small industrial and energy municipalities, the tourist and agricultural leaders. A review of the trends clearly highlights the key factors unlocking the regions' growth potential. The municipalities that grow the fastest are those that concentrate the highest investment activity. Human capital is also of key importance - leaders often have a high proportion of university graduates, and among them illiterate people and people with low education are almost absent. In the medium term, demographic trends and overall quality of life will be increasingly important.