The competitiveness of the Bulgarian economy is not improving

Bulgaria’s competitiveness has stagnated, according to data from the World Competitiveness Yearbook, compiled by the Swiss Institute for Management Development (IMD), in partnership with the Bulgarian Chamber of Commerce and Industry (BCCI). In the 2026 ranking, Bulgaria ranks 56th out of a total of 70 countries, maintaining the same position as last year, when it was ranked 57th out of 69 economies.

This result reflects both the positive aspects and the challenges facing the country. In 2021, it was ranked 53rd, but significant fluctuations followed, reflecting various economic and political factors,” the BCCI notes.

The key factors in Bulgaria’s competitiveness profile include:

• economic performance (efficiency);
• government efficiency;
• business efficiency (environment);
• infrastructure.

Compared to the previous year, the country maintained its position in terms of economic efficiency (50th place), while in the business environment category, it climbed three positions (from 67th to 64th place). However, Bulgaria has fallen by 3 positions in the infrastructure index (from 53rd to 56th place).

As expected, Bulgaria’s economic performance indicator shows both strengths and weaknesses; this year, there have been improvements in 4 out of 5 indicators compared to the previous year – namely, domestic sales, international investment, employment, and prices – while there was a negative ranking in international trade (exports),” the BCCI adds.

Regarding the government effectiveness indicator, some improvements were reported in certain areas such as public finances and business legislation, along with a decline in tax policy and the social framework. In the Infrastructure category, there were improvements in “Basic Infrastructure” and “Research Infrastructure,” along with a significant decline in the rankings for “Health,” “Education,” and “Technology Infrastructure.”

Bulgaria’s accession to the Schengen Area in 2024 and the adoption of the euro in January 2026 marked important milestones in the country’s integration into the EU, removing significant barriers to trade. “However, challenges to Bulgaria’s competitiveness remain,” the organization warns.

It adds that labor productivity remains persistently low, while private investment and innovation face significant constraints. Labor market shortages are limiting companies’ production and preventing some businesses from expanding.

At the same time, there is a lack of effective measures against corruption, especially at higher levels. Non-competitive public procurement is limiting quality investments. Many sectors continue to face labor shortages linked to poor educational outcomes and a shrinking workforce. Economic development remains uneven for vulnerable groups at risk of poverty. The healthcare system is understaffed and struggles to achieve satisfactory results.

Challenges in 2026

The ranking also lists the main challenges facing Bulgaria this year, namely:

• Political instability is stifling investment and long-term capital accumulation despite accession to the eurozone;
• Low public debt creates fiscal space for investment in artificial intelligence (AI), defense, and dual-use technologies, but this remains untapped;
• Demographic decline and a shortage of skilled workers structurally limit economic growth;
• Entrepreneurial dynamism is outpacing the development of the weak national innovation system and the connections among its participants;
• The high level of expertise in AI and information technology has a limited impact on the broader economy.

Translated with DeepL.