GLOBAL TRENDS
Global trade is facing significant challenges. In January 2026, the United Nations Conference on Trade and Development (UNCTAD) issued a report stating that global trade is at a critical crossroads. Geopolitical considerations, economic challenges, reshaping supply chains and sustainability demands are redefining the way countries trade. These challenges are particularly acute in developing countries. Governments and businesses are faced with the need to navigate this complex environment quickly and secure their supply chains and trade flows without compromising their sustainable growth.
In the next 2-3 years, the following trade trends are emerging, which, if managed properly and with adequate strategic foresight, could help companies reorient themselves and even benefit from the dynamics of global demand and supply of goods and services.
- Slowing economic growth, which in turn leads to weaker demand, less investment, price fluctuations and more limited access to financing.
- Unpredictability caused by the use of tariffs as a geopolitical tool – this leads to increased import costs, with smaller and non-diversified economies bearing the shock of their limited capacity to reorient exports.
- Reconfiguration of global value chains as a result of unpredictability – companies are looking for new locations and routes, which is a great opportunity for countries with good infrastructure, an educated population, and stable long-term policies to attract investment.
- “Servitization” of trade – global exports of services are growing much faster than exports of goods. The growth of world trade is due to trade in services, and this trend will continue to accelerate and develop thanks to unprecedented technological transformation.
- Trade in the Global South is accelerating and will continue to grow, driven by the dynamics of emerging markets in South and Southeast Asia, Africa, and South America.
- Trade in green technologies will continue to grow, driven both by regulatory measures (e.g. European legislation) and by demand for clean energy and resource efficiency technologies.
- Geopolitics will continue to destabilize trade in critical raw materials and minerals. Security of resource supplies will remain a strategic trade priority for a long time, and governments will continue to intervene in supply chains by managing prices and competing for sources of critical raw materials.
- Trade in agricultural products and food will continue to be key, with 1/3 of world trade being in food and agricultural products.
- Non-tariff barriers will continue to distort trade flows and lead to further dislocation of supply chains, driven by green and social policies, as well as security considerations.
POTENTIAL OF BULGARIAN BUSINESS
The outlined trends carry hidden potential - readjustment and a look at new markets, especially in the global South, technological transformation, development and offering of niche products, development of the extractive industry and energy.
By joining Schengen and the eurozone, Bulgaria has achieved a key strategic integration into the European economic space. Bulgaria's main trading partners are Germany, Romania, Italy, Turkey, Poland, which indicates a strong dependence on European markets and especially on German supply chains.
Countries with a more complex export structure have the potential for greater and more sustainable growth. In this sense, Bulgaria's export structure still remains in the spectrum of low- and medium-complexity products.
This is why Bulgaria can use the realignment of supply chains to its advantage by positioning itself strategically through:
- Using the favorable geographical location combined with Schengen and Eurozone integration as an asset to attract investments in high-tech sectors.
- Diversification to markets outside the EU – in Central Asia, South and Southeast Asia, Africa and South America.
- Investments in new technologies and automation and work on new products with higher complexity. Investments in development and active management of intellectual property.
EU FREE TRADE AGREEMENTS OPEN UP MANY ADDITIONAL BUSINESS OPPORTUNITIES
The European Union has concluded two key trade agreements with the Mercosur countries (Brazil, Argentina, Uruguay and Paraguay) and India. They open up a number of additional opportunities for Bulgarian businesses.
Bulgaria's trade with Mercosur countries is extremely modest, with exports for 2024 totaling nearly €67.5 million for the four countries. The country's total imports from Mercosur countries for the same year totaled around €539 million, of which over 93% came from Brazil. However, Bulgaria has indirect exposures to these markets through European supply chains, which represent perhaps the most significant channel for Bulgarian value-added goods to enter these markets.
The EU- India trade agreement is the largest the EU and India have ever concluded and gives European businesses significant competitive advantages in key industrial sectors.
The next few years are crucial and long-term growth depends primarily on deeper strategic planning, diversification of markets and supply chains, the use of optimization technologies, reorganization of production, changing business models, and the development of new products and services.
Bulgaria’s largest exports are low- and medium-complexity products, agriculture, and metals, respectively. The Growth Lab study shows that countries whose exports are more complex than expected for their income level grow faster. Growth can be driven by a process of diversification of know-how to produce a wider and increasingly complex range of goods and services.
