No trust, no staff, no predictability – the bitter reality of Bulgarian business

Bulgarian business is entering the new year with record low expectations, according to the traditional annual survey of the Bulgarian Industrial Association (BIA) among 847 companies across the country. Pessimists account for 66% – the highest share since the crisis years of 2011 and 2020.

The 21st annual survey by the Bulgarian Industrial Association (BIA) paints an alarming picture of the economic environment in the country, shedding light on the mood of 847 micro, small, and medium-sized enterprises. After a brief period of recovery, in 2025 the Bulgarian economy takes a sharp "U-turn" back into crisis, driven by political instability and external shocks.

Traditionally, between 30 and 40% of participants in the BIA's annual surveys are optimistic about the future of the economy. Their percentage was lowest in 2011 (13%) and 2020 (11%) – in the first case after the financial crisis of 2009-2010, and in the second case because of the COVID crisis. These are precisely the years when there were the most pessimists – 71% in 2011 and 70% in 2020.

In short: Bulgarian business seems to be in survival mode, weighed down by administrative burdens and political uncertainty, the survey shows. Priorities for the coming year will focus on staff training and energy-saving technologies in an attempt to remain competitive in a highly unstable environment.

2025: A year of deteriorating indicators

Managers' assessments of the past year are predominantly negative. Only 2% of those surveyed see an improvement in the overall business climate, while 67% report a deterioration. Regarding the state of their own companies, 39% of employers report a deterioration in performance – for comparison, a year earlier, the share was 37%, in 2023 – 29%, and in the pandemic years 2022 and 2021 – 45 and 58%, respectively.

The main factors fueling this pessimism include:

• External shocks: Geopolitical tensions, the war in Ukraine, and energy insecurity;
• Internal barriers: Labor shortages (62%), heavy bureaucracy (55%), corruption (50%), and a frequently changing regulatory environment (43%) remain the biggest obstacles to growth.

Political crisis: Prolonged instability and lack of reforms make long-term planning nearly impossible.
There is also an institutional collapse of trust – the survey reveals alarming levels of distrust in key state institutions, with businesses expressing almost zero trust in the government, parliament, and the judiciary.

Digitalization: Between ambition and reality

Despite global trends, 46% of Bulgarian companies still do not plan to invest in digital transformation. Otherwise, cloud technologies (16% have implemented them) and cybersecurity (13% have implemented them) are the most prevalent.

The biggest obstacle to technological progress remains the lack of trained personnel (40%) and the shortage of financial resources (33%).

Expectations for 2026: Caution and preparation for the euro

Businesses are entering 2026 with a high degree of caution, especially in the context of the adoption of the euro on January 1. Although approval for joining the Eurozone has grown to 63% (compared to 47% in 2021), concerns remain about inflationary pressure and rising labor costs.

The majority of employers (74%) insist on maintaining the flat tax and are strongly opposed to automatically setting the minimum wage at 50% of the average wage. In response to the economic situation, companies plan to optimize their costs, with many factoring higher production costs into the final prices of goods and services.

Translated with DeepL.