The World Bank has warned that Bulgaria must overhaul its current growth model if it wants to maintain economic convergence with the rest of the European Union, arguing that the country's traditional drivers of development are losing momentum. Experts presenting the institution's latest analysis in Sofia said that without substantial reforms, Bulgaria's annual economic growth could gradually slow to just 1.2% by 2050.
According to the report, the country's low-cost competitive advantage is steadily weakening, while the gains achieved through the redistribution of labor and capital have largely been exhausted. Regional Director Abebe Adugna said the existing model is approaching its limits and will face even greater pressure from long-term demographic trends. “Bulgaria's growth model is running out, while competitiveness based on low costs is weakening, and the benefits from the distribution of production factors are yielding ever smaller results,” he said. Adugna added that an aging population and a shrinking workforce will further challenge future economic expansion as fewer people enter the labor market.
The World Bank argues that sustaining stronger growth will require unlocking the country's human capital, encouraging greater public and private investment, expanding capital markets, promoting competition, and strengthening institutions. Without these structural changes, Bulgaria's ability to catch up with wealthier EU economies is expected to diminish.
