New elections? Two thirds of Bulgarian companies suffer from the political crisis

About two-thirds of companies in Bulgaria say that the political crisis in the past year has hurt them. The spiral of new elections, which began in the spring of 2021 and continues to this day, deprives businesses in the country of much-needed predictability for investment and development.

According to 63.5% of companies, what has happened politically in the past 2022 — the infighting between politicians, the incessant election campaign and the "overnight" changes — have had a "rather negative and highly negative" impact on their operations. This is according to the annual survey of the Executive Agency for the Promotion of Small and Medium-sized Enterprises.

Some 35%, on the other hand, said the political whirlwind had not had an impact on business. A negligible minority, on the other hand, said that the series of parliamentary elections in search of stable government had had a positive impact for their business.

Other serious problems for business in Bulgaria include the war in Ukraine, which has negatively affected just over half of Bulgarian firms. The reasons mainly relate to disrupted supply chains and loss of markets.

More than 80% of the companies indicate that they are affected by high inflation due to the increase in the price of energy, raw materials and materials they use and due to the reduced solvency of their customers.

Still, nearly half of the respondents continue to point to the pandemic effect as a "significant obstacle" in their development. Around 40% describe the virus and its effects as a "moderate obstacle." Their problems range from disrupted supply chains, loss of market position to loss of skilled labour. Only just over 10% say the pandemic has had rather little impact on their operations, and these are mostly small businesses.

Overall, around 37% of companies still recorded an increase in turnover over the past year. Roughly the same proportion of companies, on the other hand, said they had no change in turnover and the remaining third reported a decrease.

More than 20% of Bulgarian companies have improved their position on the domestic and foreign markets, which should give Bulgarian companies confidence that they can find a place on international markets and be competitive.

Despite the relatively good indicators regarding the market positions of the enterprises, for approximately 40% of the companies this is accompanied by a deterioration of the financial results.

Most companies — over 60% — express optimistic expectations for the development of their business in Bulgaria.