The Bulgarian Industrial Association presented for the third consecutive year its annual survey "BIA Index 2025", which measures the effectiveness of economic policy in the member states of the European Union through a system of internationally comparable indicators.
The index tracks Bulgaria's development in three key areas – "Investment and Innovation", "Reforms and Institutional Environment" and "Effectiveness of Fiscal Policy". This year's edition is dedicated to the "Reforms and Institutional Environment" pillar and analyzes the factors that determine the economy's ability to attract investment, increase productivity and achieve sustainable growth.
The results show that Bulgaria continues to have significant competitive advantages. The country is among the leaders in the EU in tax competitiveness, ranking first in terms of effective average tax rate and second in terms of corporate tax rate. In addition, Bulgaria retains its advantages related to membership in the European Union, access to the single European market and its strategic geographical location.
At the same time, the analysis shows that Bulgaria's competitiveness increasingly depends on the quality of institutions, the effectiveness of public governance, the regulatory environment, human capital, and the ability to implement consistent reforms.
Bulgaria's overall score in the BIA Index 2025 is 29.98 points, which places the country in 27th place among the member states of the European Union. In the pillar "Reforms and institutional environment", which is the focus of this year's edition, Bulgaria receives 31.10 points and ranks 25th in the EU. The most serious lag within this pillar is observed in indicators related to the rule of law, government effectiveness and digital readiness for the future.
Among the main structural challenges facing the Bulgarian economy are:
- insufficient institutional efficiency;
- the weak digital readiness of the public sector;
- unfavorable demographic trends;
- the shortage of qualified labor;
- the limited connection between education, science and business;
- the insufficient speed of implementation of innovations and new technologies.
As a member of the European Union, Bulgaria has significant opportunities to accelerate economic development through access to the single market, European investment instruments and the Union's technological initiatives. However, nearly two decades after joining the EU, the country continues to lag behind in indicators related to labor productivity, innovation capacity, digital readiness and the quality of public governance.
Increasing geo-economic competition, green and digital transformation, the deployment of artificial intelligence and changes in global value chains place new demands on the ability of countries to increase productivity, technological capacity and institutional efficiency. In this context, sustainable economic growth depends less and less on individual competitive advantages and more and more on the quality of public policies and the ability to implement reforms.
The results of the analysis of the “Reforms and Institutional Environment” pillar show that the main constraints to Bulgaria’s competitiveness are related to the quality of institutions, the effectiveness of public administration, the regulatory environment, digital readiness and the development of human capital. Although the country retains a number of competitive advantages, including high tax competitiveness, lagging behind in these indicators limits their ability to translate into higher productivity, investment and sustainable economic growth.
Based on Bulgaria's performance on the indicators, the BIA has formulated five key priorities for economic policy. They are aimed at improving the country's performance in the areas where the lag compared to other EU member states is most significant, limiting structural weaknesses in the institutional environment and accelerating the process of economic convergence and increasing competitiveness:
- Improving institutional efficiency – rule of law, quality of regulations and administrative capacity;
- Human capital development – STEM education, workforce qualification and closer connection between education and business;
- Promoting innovation and technological transformation – innovation capacity, implementation of new technologies and investments in research and development;
- Improving the investment environment – predictability, transparency and reduction of administrative burden;
- Accelerating digital transformation – digitalization of public services and development of e-government.
According to BIA, Bulgaria has the necessary prerequisites to accelerate its economic development and improve its position within the European Union. Tax competitiveness, strategic location and access to the single European market create a good basis for growth. However, in order for these advantages to be fully used, they need to be complemented by more effective institutions, better quality of public administration, development of human capital and accelerated technological transformation.
The potential is there. The challenge is to translate it into higher productivity, more investment and sustainable economic growth .
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