Key developments and challenges

The Bulgarian economy has been severely affected by the global downturn. A return to a sustainable growth path will depend on the implementation of policies that can facilitate a successful structural shift from the non-tradeable to the tradeable sector, as well as a clearly communicated medium-term fiscal framework within the Maastricht criteria.

Improvements in infrastructure and related services will underpin the competitiveness of the economy. Such improvements need to be pursued not only via government transfers, but also by strengthening of the municipal sector through greater fiscal decentralisation, stronger regulation and capacity-building at the local level.

Increasing the capacity and attracting more investment in the Bulgarian energy system should be pursued through policies that promote further market opening and interconnectivity with neighbouring countries.