Bulgaria: Selected Issues

International Monetary Fund

No 2025/307, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper focuses on scaling-up quality public investment for stronger growth in Bulgaria. Economic momentum has been strong despite an uncertain environment, yet a more robust growth is needed for faster income convergence. The paper examines Bulgaria's economic growth potential and the role of scaling up quality public investment to accelerate income convergence with the EU and reduce regional disparities. Despite strong economic momentum, Bulgaria's income levels remain below most EU peers, with significant gaps in infrastructure quality and availability. The report highlights the need for higher and more efficient public investment, particularly in transport, water, and tourism-related infrastructure. Bulgaria has access to substantial EU funds, totalling EUR 18.7 billion, but absorption rates remain low due to administrative bottlenecks and stalled reforms. Using the Debt Investment Growth and Natural Resources model, the report simulates the macroeconomic impact of full EU fund absorption and improved investment efficiency. Results show that gross domestic product could increase by up to 2.3 percent by 2030, with higher private investment and consumption. The report emphasizes the importance of reforms to enhance public investment efficiency and accelerate EU fund utilization for sustainable growth. .

Keywords: investment scenario; investment need; staff team; IMF country; absorption of EU; Public investment spending; Infrastructure; Private investment (search for similar items in EconPapers)
Pages: 12
Date: 2025-11-24
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