Regional Profiles 2024: Economic Growth, but with Increasing Inequality

Press Release, 14.11.2024

For over a decade, the Institute for Market Economics has produced the most comprehensive study on the economic and social development of Bulgaria’s regions. The Regional Profiles report, based on 80 indicators, provides a detailed analysis of the 28 regions.

All data and materials are available at: www.regionalprofiles.bg

The 2024 edition of Regional Profiles reveals that economic growth continues to be driven by several smaller regions, while Sofia’s share of the national GDP gradually decreases. Nevertheless, Sofia remains the economic powerhouse, contributing 41% of Bulgaria’s GDP in 2022, or 68.7 billion BGN. It is followed by Plovdiv and Stara Zagora, with Plovdiv contributing 6.5% and Stara Zagora, bolstered by its strong energy sector, contributing 6.2%. The recovery of tourism is driving positive trends in Varna and Burgas, while industrial growth supports development in Sofia’s surrounding areas. Conversely, regions like Vidin, Silistra, and Dobrich show slower growth, further widening gaps in income and quality of life.

Graph 1: Gross Domestic Product of Regions (million BGN, 2022)

The service sector dominates in Sofia and the coastal regions of Varna and Burgas, contributing the largest share of value-added. Plovdiv also reports strong growth in services, which now account for 60% of its local economy. Meanwhile, industry remains a key driver in Stara Zagora and Vratsa, while agriculture continues to play a significant role in less developed areas like Silistra.

Investment activity across the regions shows stark disparities. In 2022, data highlights a significant increase in the acquisition of fixed assets nationwide, with Sofia leading at nearly 8,800 BGN per capita. It is followed by Sofia Region and Plovdiv, where per capita investment reaches 4,600 BGN.

Despite labor market expansion in 2023, some regions experienced a decline in employment rates for the 20–64 age group. For instance, Vratsa and Lovech recorded the largest drops, while Pleven and Sliven saw increases exceeding four percentage points. Unemployment remains low in Sofia and Varna but high in Vidin and Montana. Wage disparities persist, with Sofia’s average gross monthly salary reaching 3,129 BGN, compared to 1,519 BGN in Blagoevgrad. Slower wage growth in poorer regions contributes to a widening gap in living standards.

Graph 2: Natural and Mechanical Population Growth (2023)

Regions with higher shares of university graduates tend to be more successful, as this correlates with the development of high-tech, high-productivity sectors in services and industry. Sofia leads with 54% of residents aged 25–64 holding higher education degrees, followed by Varna and Plovdiv. In less developed regions like Pazardzhik and Montana, lower education levels limit opportunities for attracting investment and fostering innovation. Graduation exams in 2024 reveal substantial disparities in educational outcomes, with Sofia and Smolyan achieving the highest average grades, while Shumen and Pleven rank lowest. Although the share of students failing the graduation exam has declined in some regions, it remains high in others.

Migration plays a crucial role in improving demographic trends. Positive net migration was recorded in Kardzhali, Burgas, and Varna, where tourism recovery and growth in the hospitality sector are key factors. In contrast, Vidin and Montana continue to lose population, and high mortality rates worsen demographic challenges. Regions like Vidin and Gabrovo have the highest shares of elderly residents (65+), exceeding 30%, while Sofia has the lowest.

Health indicators also vary widely across regions. Life expectancy is highest in Sofia and Kardzhali at 75.4 years and lowest in Vidin and Vratsa. Meanwhile, the tourism sector shows signs of recovery, with the number of overnight stays exceeding pre-crisis levels in most regions. Varna and Dobrich are expected to return to pre-crisis levels next year, while Burgas has already achieved significant recovery.

The Regional Profiles 2024 report underscores the need for targeted policies to reduce regional disparities and foster economic growth and social cohesion across Bulgaria.

The full text of “Regional Profiles 2024” is available here:
All data and materials are accessible at: www.regionalprofiles.bg