Covid-19 has been the most frequently used word in the past year. Meanwhile, Bulgaria’s cabinet has allocated substantial amount of money to support the sectors impacted by the coronavirus pandemic. Now, it is time to take stock of this period. In an interview for BTA, Petar Ganev, Senior Economist at the Institute for Market Economics, talked about different scenarios regarding the development of Bulgaria’s economy amid the Covid-19 crisis.

Bulgaria is in a relatively good condition as compared to other EU member states. According to Petar Ganev, in 2020, the economies of the EU countries contracted by 6% to 7% on average, whereas according to the latest raw data of the National Statistical Institute, Bulgaria’s gross domestic product declined with 4.2% as compared to 2019. The GDP decline in Estonia, Latvia and some countries in Eastern Europe was similar.

The moratorium on loan repayments applied in response to the Covid-19 crisis and the 60/40 wage support scheme aimed to support employment in this country are among the most efficient measures introduced by this country’s cabinet.

“The partial recovery of the Bulgarian economy may begin this year. However, we must not forget that it is not able to work in full gear and show its full potential because of the existing anti-epidemic measures”, contends the analyst.

The economic recovery also depends on the vaccination rate in Bulgaria. According to the best-case scenario, in the summer of 2021, this country will make a good progress in terms of vaccination and in the autumn, we will not have to worry about a possible new lockdown. In this case, this year’s economic growth should be around or above 3%. Thus, we can make up for lost time and in 2022, Bulgaria’s GDP may reach 4%-5%, which corresponds with the forecast of the European Commission. According to the negative scenario, in the autumn of 2021 we will need more anti-epidemic measures, if the vaccination rate is low and if new coronavirus variants appear and the efficiency of the Covid-19 vaccines is low.

As for whether Bulgaria would be able to adapt to the post-Covid-19 world, the economic expert contends that although the coronavirus pandemic has catalyzed some economic processes such as the transition to automation and robotization and the transition to a higher value-added economy, it is not the main reason for the latest trends.

“The processes of globalization will continue and Bulgaria can only benefit from this. This country is part of the big European market and offers the foreign investors competitive business costs in terms of salaries, etc. The foreign companies could reduce their expenditures if they decide to invest in this country”, concluded Petar Ganev from the Institute of Market Economics.

English version: Kostadin Atanasov