Global Foreign Direct Investment and Its Impact on Bulgaria

Galateya Kolikova

Economic Thought journal, 2025, issue 4, 567-577

Abstract: This paper analyses shifts in global Foreign Direct Investment (FDI) and their impact on Bulgaria, focusing on the period 2021-2024. The study combines secondary data analysis from sources such as UNCTAD, Eurostat, and the Bulgarian National Statistical Institute with a SWOT framework to assess Bulgaria’s position amidst evolving European and global FDI patterns. Global FDI declined sharply during the COVID-19 pandemic in 2020 but rebounded strongly in 2021, driven largely by increased investments in digital economy sectors and green energy. However, from 2022 onwards, FDI flows experienced instability and declines, particularly in developed countries, though digital and renewable energy investments continued to grow. In Bulgaria, FDI inflows showed resilience and growth after the initial pandemic shock, with significant increases in 2022 and 2023. The country’s investment attractiveness is enhanced by the growing IT sector investments, though challenges remain, such as bureaucratic inefficiencies, underdeveloped infrastructure, and a dependence on European markets. Bulgaria’s integration into global value chains, especially in manufacturing and IT services, aligns with EU priorities in digitalisation and sustainability. The study concludes that Bulgaria’s FDI attractiveness depends on addressing institutional and infrastructure weaknesses, leveraging EU recovery funds effectively, and promoting high-tech to sustain long-term economic growth and competitiveness in a fluctuating global investment environment. Policy improvements in governance and strategic investment in innovation are necessary for Bulgaria to capitalise on emerging global FDI trends.

JEL-codes: F21 F23 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:bas:econth:y:2025:i:4:p:567-577

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