In 2022 Bulgarian Municipalities Returned to Rapid Economic Growth
In 2021, the growth of municipal economies, against the backdrop of recovery from the COVID pandemic, was highly uneven and concentrated in regions where tourism and agriculture play a leading role. In 2022, we observed nearly universal growth, with only a few municipalities reporting a decrease in added value on an annual basis.
In 2022, there was a decline in added value by factor costs for non-financial enterprises in only 18 out of 265 municipalities in the country. It can also be said that there is no visible territorial concentration of municipalities with negative economic dynamics. Meanwhile, there are municipalities with triple-digit growth – Beloslav (676%) due to the boom in trade, Tryavna (387%), Breznik (320%) after the new mine started operating. A strong growth was recorded in the economy of Sofia Municipality – 24% year-on-year after a stagnation in 2020 and 2021. A similar growth is seen in other major cities – 19% in Varna, 17% in Plovdiv, 14% in Burgas, and 13% in Ruse. When reviewing the growth data, it should be noted that the second half of 2022 was marked by high inflation, which means that the difference between nominal (as presented here) and real growth in municipal economies varies significantly. It is also necessary to account for the significant declines in many places in previous years.
In 2022, the largest municipal economy remained Sofia, creating 41 billion BGN in added value. The top five is completed by Plovdiv (5.3 billion BGN), Varna (4.4 billion BGN), Burgas (2.3 billion BGN), and Ruse (1.7 billion BGN). Energy center Radnevo and Stara Zagora also generated over a billion in added value, while Kazanlak and Pleven were close to this amount. The number of municipalities with under 100 million BGN in added value decreased to 172 from 185 the year before. The smallest municipal economy in the country is Treklyano with only 100 thousand BGN in added value, and the only other municipality with less than 1 million BGN is Chavdar.
The municipality with the highest added value per capita in 2022 is the industrial center Devnya with 102 thousand BGN. The top 5 also includes Galabovo (55 thousand BGN per capita), Sopot, and the capital (both with 32 thousand BGN per capita). However, it is important to note that the data for most municipalities in the Srednogorie region, Kozloduy, Radnevo, and Krumovgrad are confidential, and they – thanks to their strong mining, processing, or energy industries – would rank among the leaders. Five municipalities remain with under 1,000 BGN per capita in 2022, and 135 have less than 5,000, once again demonstrating the concentration of a significant portion of Bulgaria’s economic activity in relatively compact geographic areas.
The rapid recovery and return to growth of nearly all municipalities in 2022 once again confirm the flexibility of the Bulgarian economy amid the web of crises it has faced since the start of the decade. However, after the pandemic, war, and inflation, major inequalities within the country are coming to the forefront – both in terms of levels and trajectories of economic development. The regional map clearly shows the good examples – large service centers, small industrial and energy municipalities, and tourism and agricultural leaders. Reviewing the trends clearly highlights the key factors that unlock growth potential in regions. The municipalities that grow the fastest are those with the highest investment activity. Human capital is also of crucial importance – leaders often have a high share of university graduates, and illiterate and low-educated people are almost absent. In the medium term, demographic trends and overall quality of life will also become increasingly important.