VARNA CITY OF KNOWLEDGE, Economic Profile and Trajectory of Development 2020, 2020

Varna is the largest economic center in Northern Bulgaria with total production for 2018 grossing over BGN 10 billion and 215,000 people employed in the whole region in the year of 2019. The „martime capital“ of Bulgaria has high-qualitaty educational infrastructure, traditionally attracts talent and has managed to successfully reorient its economy towards higher added value, building upon digital skills and development activities in ship manufacturing, informatics and medicine.

Sofia Labour Market 2019, October 2019

Employment in Sofia has reached 75% of the active population, with the number of employees varying around 700 000 people in the different quarters due to seasonality. Following the current dynamics, in the next five years the city economy will add new employment predominantly in ICT and outsourcing, but will lose employment in health and trade. Due to the extremely low number of unemployed in the base period, the accuracy of their estimated number and composition is quite low; the results suggest that some 10 000 people will be unemployed, mostly with secondary education.

Sofia: Economic and Investment Profile, November 2019

Sofia is the biggest regional economy in the country. About 40% of Bulgaria’s GDP is produced in Sofia. The contribution of Sofia Municipality to the national economy has been growing at a moderate but stable rate in recent years, reflecting the continuing concentration of economic activity in the Capital. Sofia provides the highest salaries, which are 38% higher than the average levels for Bulgaria. Although Sofia was not spared by the economic crisis of 2008-2009, the recession was not as deep as in the rest of the country. Besides, the city managed to fully recover by 2010, and since 2013, the economy of Sofia is expanding. In the last three years Sofia’s economy marks a real GDP growth, significantly above the national average

Assessment of the people not in employment, education and training (NEETs) in Bulgaria and policy measures to effectively address their integration, September 2019

Despite the positive trend of the labour market in recent years, Bulgaria is still struggling to offer inclusion opportunities for a significant share of young people. The present report provides a thorough analysis of the level and geographical distribution of NEETs between 15 and 34 years old, as well as of the main factors that determine youth inactivity. It also reviews the current policies implemented by the Bulgarian government related to NEETs and provides a series of recommendations that could support the sustainable inclusion of inactive young people.

Judicial Map. An Attempt to Restart the Debate, May 2019

The study shows that there is no coherent judicial organization model. Therefore, the judicial map is a sum of all courts and prosecutor’s offices without a guiding organizational criterion except for the instance control one. Throughout the years, the hierarchical division was supplemented by the atypical for Bulgaria division of jurisdiction according to the accused individuals, as specialized criminal courts and prosecutor’s offices hear cases on the basis of this principle. That leads to drawbacks which become clearly evident when the system needs to be reformed. The reform of the judicial map, translated into plain language, means optimizing the number of courts and prosecutor’s offices due to a change of the economic, demographic and political conditions. While the world is changing, Bulgaria is shrinking and aging - both generationally and technologically. The diminished population, in places reaching depopulation, and the introduction of new technologies, necessitates the restructuring of the heavy institutional apparatus.

German Investments in Bulgaria 1990 - 2017, 2019

The present study aims to make a realistic and comprehensive assessment of foreign direct investment by German investors in Bulgaria by identifying Bulgarian companies whose direct foreign owners are companies in third countries but the ultimate ownership is Germany.

The Manufacturing industry in Sofia, February 2019

Despite its share of less than 20% of the local economy, in recent years manufacturing has been increasing its weight in both the total output and the export of the city. The data review established that manufacturing of food, base metals and electrical equipment are the leading manufacturing sectors in Sofia. The industry employs more than 70 000 people, and salaries, although growing significantly in the last few years, still remain below the average for the city.

Skills Mismatches: An Impediment to the Competitiveness of EU Businesses, 2018

Skills mismatches are widely accepted as a factor that drags down on potential economic growth and as such require concrete policy measures both at the EU and national level. This report was prepared by the Institute for Market Economics (IME) and is dedicated to the study of skills mismatches in the EU and their effect on the competitiveness of EU businesses. It includes a comprehensive review of existing literature on the issue and outlines some of the main conclusions regarding the relation of skill mismatches to education, personal and aggregate productivity, labour market dynamics and outcomes, innovation capacity and competitiveness. The study also includes the results of a dedicated survey designed to shed further light on the causes and effects of skills mismatches from the point of view of companies.

U.S. INVESTMENTS IN BULGARIA (1990 – 2016) + 7 case studies, 2018

The objective of this study is to make an as realistic and comprehensive assessment as possible of the foreign direct investments by companies whose beneficial owners are U.S. investors. It is achieved by identifying the Bulgarian companies whose foreign direct owners are third-country companies, but whose beneficial ownership has U.S. origins.

Sofia: Economic and Investment Profile, 2018

Sofia is the biggest regional economy in the country. About 40% of Bulgaria’s GDP is produced in Sofia. The contribution of Sofia municipality to the national economy has been growing at a moderate but stable rate in recent years, which reflects the continuing concentration of economic activity in the Capital. Sofia provides the highest living standard, compared to the rest of the country. IME profiled the advantages and the challenges to the Capital’s development.

The Role of Small and Medium Enterprises in Sofia’s Economy, 2018

The purpose of this study is to examine the current state and the future trends of the small and medium-sized enterprises in Sofia by providing an analysis of their development over the last decade and in the wider context of the Bulgarian economy as a whole.

The Bulgarian Currency Board – A Relic from a Turbulent Past or a Necessary Tool for Economic Stability, 2018

This paper aims to explore the history, structure, and economic consequences of the currency board in Bulgaria, which was introduced as an emergency measure to combat the late-nineties economic crisis, though has stayed in place ever since. The paper provides a brief description of the general theory of currency boards, followed by a detailed analysis of the various aspects of the economic crisis during the Videnov government, resulting from the return to centralized and state-led economic policies: high infl ation, shrinking of household incomes and savings, deterioration of trust in the banking system, collapse of the baking system and national budget crisis.

Sofia Outsourcing Industry profile 2017

Bulgaria, and especially Sofia, have proved to be a major outsourcing destination on a global scale. The outsourcing was not affected by the financial crisis and has continued to grow in the years after. The share of the Outsourcing sector in Sofia’s economy has increased significantly. The number of outsourcing enterprises is growing faster than the average growth for Sofia. The sector has a high degree of diversification and equal development between sub-sectors. Recent years have witnessed a consolidation in the sector as large companies now account for 1/5 of total workforce employed in outsourcing activity in the capital.

Regional Profiles: Indicators of Development, 2017

The „Regional Profiles: Indicators of Development” study is carried out by the Institute for Market Economics. The aim of the project is to provide a snapshot of the socio-economic condition of Bulgarian districts as of mid-2017, as well as their development since 2000. The study seeks answer to the question what makes some districts more developed and prosperous in comparison to others. The regional profiles were outlined on the basis of differente indicators, describing the economic and social development of Bulgarian districts. The profile of each district consists of an overview and commentary on the more notable results and trends in each of the twelve categories of indicators.

Economic Centres, 2017

In 2017, the IME set out to map the borders of Bulgaria’s economic centres. Our goal was to go beyond the country’s administrative and territorial division and establish new internal boundaries, based solely on natural economic processes. The grouping within the centres was done around the economic cores, which gather significant daily labour migration from surrounding municipalities, have significant concentration of employed people and generate relatively large production.

"My Taxes" is Now Available in English, 2017

In October 2016 the IME and the Friedrich Naumann Foundation for Freedom launched "My taxes" - a specialized online which can be accessed on the kolkodavam.bg website. Now we are happy to announce that the webpage is already available in English! The mirror webpage in English allows comparisons between the tax burden in Bulgaria and that in other countries, where such online applications can also be found.

State and Development of the IT Sector in Sofia municipality, 2017

The analysis of the IT sector’s main indicators and their dynamics in recent years leads to some general conclusions: There is considerable competition between international and local companies in the sector with the market leaders changing from year to year. The tendency is towards a growing importance of international companies.The Sofia IT sector’s importance both in the wider ICT sector and in the national economy as a whole is on the increase: in 2015 the capital’s IT sector yield

Sofia Investment Profile 2017

Although Sofia was not spared by the economic crisis of 2008-2009, the recession was not as deep as that in national production by far. Besides, the capital city managed to overcome the recession’s consequences as early as 2010 which indicates the resistance of the capital’s economy to changes in the economic cycle and shocks coming from outside. The crisis left its imprint on the structure of Sofia’s economy. The most significant change in that structure that resulted from the recession of 2009 was the crisis in construction. That sector shrank to almost double to less than 5% of the local economy in 2016. Simultaneously, processing industries increased their weight in the local economy after considerable investment in pharmaceuticals, car parts, cosmetics, optics etc. By 2016 processing industries had a share of 10.6% or over 2 percentage points more than its share prior to the crisis.

Flat Tax in Bulgaria, 2016 

The present essay collection is not aimed at claiming authorship on the 10 percent flat tax. It does include, though, texts by some of the people who were direct participants in the process of preparing, providing arguments in support of, and implementing the reform in Bulgaria. Efforts, which, as becomes clear from the book, span over 10 years. It is this historical perspective that makes it possible to highlight the flat tax as a logical and natural result of a comprehensive change in the country’s taxation and social insurance model.

Economic Populism in Bulgaria and Its Consequences, 2016

Review of different types of economic populism in Bulgaria and its consequeces.

Management and Budget of the Judiciary, 2016

Analysis of the budget and overall resource management of the judiciary in Bulgaria. The aim of this analysis is to determine the effectiveness of resource management in the judiciary and also the transparency and rationality of the budgeting process. The analysis unveils a number of serious problems both in the management of resources in the judiciary and in the process of budget drafting, implementation, and reporting. 

Regional Profiles: Indicators of Development, 2016

This is the fifth annual edition of “Regional Profiles: Indicators of Development” – the most comprehensive regular study of the social and economic development of Bulgaria’s regions, carried out by the Institute for Market Economics (IME). The report contains socio-economic profiles of each of the 28 districts, based on 63 indicators grouped in 12 different categories such as investment, labour market, infrastructure, education, and others. So far, the IME produced several such municipal profiles (Sofia, Bansko, Vratsa, etc.) that give detailed information on the local economy and its structure, the available workforce, and other aspects of the business and social environment.

Regional Profiles: Indicators of Development, 2015

This edition of “Regional Profiles: Indicators of Development” is  a comprehensive study, which analyses the economic and social development of Bulgaria’s 28 districts, based on 63 indicators and includes a cluster analysis that groups the regions in clusters according to their similarities and differences. The study seeks an answer to the question of what makes some districts relatively more developed and prosperous and others - poorer.

Regional Profiles: Policy Proposals, 2015

The recommendations, outlined in “Regional Profiles: Policy Proposals 2015”, are a result of IME’s three years work in the field of regional development. They are a result of three years of work by the Institute for Market Economics in the regional development sphere. The recommendations on local finances intend to restore the relationship between “taxation” and “political representation” on the local level, as well as to create real financial incentives for local institutions to work towards attracting investments and creating jobs.

Social and Economic Impacts of the Proposed New Taxes on Some Foods, 2015

The content of this report aims at reviewing the arguments in favor of the new unhealthy food tax, its goals and the likelihood of them being achieved or compromised as well as at reviewing the possible and probable social and economic impact of the introduction of the tax. The report also aims at contributing to the discussion on the so called Bill on the Taxation of Unhealthy Food which is to take place in September, as promised by the Ministry of Health to journalists.

Regional Profiles: Indicators of Development, 2014

This year’s research Regional Profiles: Indicators of Development follows the successful tradition of the previous two editions by providing an in-depth analysis of the socioeconomic environment in Bulgaria’s districts. This edition includes four thematic analyses covering various aspects of the regional development, along with an updated profile of each of the twenty-eight districts. In addition to the customary typology of the districts, the analysis researches the process of the labour market recovering following the crisis, the dependencies between the fiscal policy and the regional development, and investment activities throughout the regions.

Analysis of the Potential for Cultivation of Fruit and Vegetables in Bulgaria, 2014

The purpose of this study is to identify the perspective crops in the vegetable- and fruit-growing sectors from the viewpoint of domestic demand and export potential.

Natural Gas from Shale: Socioeconomic Impacts for Bulgaria, 2014

The purpose of this report is to outline opportunities that could be potentially missed by Bulgaria.  The autors examine the direct, indirect and induced impacts of shale gas exploration and production on the economy, the employment tax revenues of the state and local budgets, and the probable side effects of greater energy diversity and security.

The Image of Entrepreneur in Bulgaria, 2013

The analysis aims to improve the image of the entrepreneur as a key player in the economy due to indications of worsening perceptions of society towards this figure. In addition to establishing the image of entrepreneurs in society at present, the authors will try to find an explanation for existing perceptions, and to improve it by conducting a public campaign.

Regional Profiles: Indicators of Development, 2013

This year’s edition of „Regional Profiles: Indicators of Development of Development” aims to provide objective, timely and comprehensive information on the development of Bulgarian regions. The publication aims to paint as complete a picture as possible, covering both the economic and social aspects of life in the regions. The profiles of Bulgaria’s 28 districts cover eight categories, each of which is related to the quality of life and the level of development of those regions: Economy, Taxes and Administration, Infrastructure, Demographics, Education, Healthcare, Environment, and Social Environment. You will find all about these categories, indicators and sources of information in the description of the methodology applied during this survey, and at the end of the booklet you will find some of the main primary data.

“Excise Taxation of Tobacco Products in Bulgaria – Review and Recommendations”, 2013

Review and analysis of excise taxation of tobacco products in Bulgaria in the 2007 - 2003 period and recommendations in view of achieving new EU requirements by 2018. 

Plain Packaging and its Unintended Consequences, 2012

This Policy Note has been provoked by the growing tendency of governments around the world to regulate the advertising industry more and more strictly. Whether in the name of consumer protection or health concerns, decision-makers are eager to attack advertising of products deemed harmful. Recently it has been the sole idea of branding that has been put into question. Plain packaging for cigarettes is now officially debated in Europe and the aim of this Note is to elaborate on the unintended consequences of such a policy.

Multiannual Financial Framework (2014-2020) of the European Union: Analysis and Potential Effects on Bulgaria, 2012

The analysis discusses the changes that the EU is planning to implement in the upcoming MFF, explores the reasons behind them and makes conclusions about their effect on the Bulgarian economy. The main points of interest include the basic structure of the MFF, the proposed reforms of the Common Agricultural Policy, the heading for Smart and Inclusive Growth and the way the budget is financed.

Regional Profiles: Indicators of Development, 2012

The publication „Regional Profiles: Indicators of Development” aims to provide objective, timely and comprehensive information on the development of Bulgarian regions, both in static and dynamic terms. The publication aims to paint as complete a picture as possible, covering both the economic and social aspects of life in the regions. Regions are subjected to overview at the level of administrative districts (oblasti); and this division was largely determined by the available data. Going down to the municipal level and preparing 264 profiles would not only be an enormous task but also quite impossible since much of the data is either not available or does not make much sense at the municipal level. The profiles of Bulgaria‘s 28 districts cover eight categories, each of which is related to the quality of life and the level of development of those regions, including: demographics, economy, business environment, infrastructure, health, environment, education and social environment. You will find all about these categories, indicators and sources of information in the description of the methodology applied during this survey, and at the end of the booklet you will find some of the main source data. 


This analysis estimates the expected long-term benefits to investing into Roma education in Bulgaria. By budget benefits we envisage the direct financial benefits to the education to the national budget. The basic perception is that investing extra money into Roma education would pay off even in fiscal terms. In order to be successful, investments should take place in early childhood. Successful investments are also expensive, but if it is done the right way, such investments compensate the costs in terms of extra tax benefits in the future. This study looks at the expected budgetary benefits of a successful investment. 

Bulgarian Migration: Incentives and Constellations, 2005

This report presents the findings of a research conducted by researchers from the Institute for Market Economics, Sofia, in the period February 2004 – October 2004 upon commission by the Open Society Institute - Sofia. The main purpose of the study was identification of current migration trends observed in Bulgaria and analysis of the incentives and impact that motivate migration and migration-related policies.


A Comparative Study of the Tax Systems in Central Europe:Needs for Deregulation, 1998

According to the three organizations which have prepared the report, there is a growing need for the reduction of the role of the state and the adaptation of the tax system to the actual capabilities of the private sector. Only when this is achieved, can the growth rate be increased and the economic relationships based on partnership with Western countries be built. Cooperation with the business community may facilitate the achievement of the above-mentioned objective. Therefore, our organizations decided to base the assessment of the current situation and our recommendation for change on the opinions of representatives of the business community.