The ILO in Bulgaria

Despite a swift post-pandemic recovery, the Bulgarian labour market faces important challenges 

After a sharp 4 per cent drop at the beginning of the COVID-19 pandemic in 2020 (World Bank, 2024), the Bulgarian economy has almost fully recovered from the pandemic-induced shock. Job retention schemes, positive wage dynamics, higher pension expenditures and low household debt supported the fast recovery. Real GDP rebounded to almost 8 per cent in 2021 and 3.9 per cent in 2022 (World Bank, 2024). In 2023, real GDP growth was at 1.9 per cent and is expected to reach 2.2 per cent in 2024 and will remain stronger than the EU average in the 2024-28 forecast period (EIU, 2024).  

The economic development gap between Bulgaria and the rest of the EU continues to narrow. Per capita income has risen steadily, increasing by a factor of two and a half between 2000 and 2022 (World Bank, 2024). However, its level stood 38 per cent below the EU average in 2022 (Eurostat, 2023) and remained the lowest in the EU. Income inequality, measured by the Gini coefficient, has tended to decrease but its level was the highest among all EU countries in 2022 (Eurostat, 2023). The percentage of Bulgarians at risk of poverty or social exclusion was 32 per cent in 2022, 11 points higher than the EU average in 2022 (Eurostat, 2024). 

Bulgarian labour market indicators have returned to pre-pandemic levels. The unemployment rate stood at 4 per cent in 2022 and remains among the lowest rates of the last decade (ILOSTAT, 2024). The employment-to-population reached its highest rate in a decade in 2022, at over 54 per cent (ILOSTAT, 2024). The high number of youth neither in employment, education, or training (NEET) remains a concern. Despite a significant reduction of the NEET rate from 21.5 per cent in 2012 to 12.5 per cent in 2022 (ILOSTAT, 2024) the rate is still above the EU average (11.7 per cent the same year) and the EU 2030 target (below 9 per cent). Moreover, employment differences across regions and across ethnic groups are glaring and contribute to unequal labour market outcomes. People living in rural areas and people belonging to ethnic minorities face low employment and high unemployment rates compared to other groups.  

In addition, unfavourable demographic trends lead to a shrinking labour force. The population has fallen from 9 million to 7 million in the last 30 years. Emigration alone has contributed to a 10 per cent decline of the economically active population. Continued low fertility will accentuate the ageing of the population, raising concerns about the sustainability of social protection system and future labour shortages.  

Cooperation between the ILO and Bulgaria 

Since the 1990s, the ILO has assisted Bulgaria in its economic and labour market transformation and in its accession to the EU in 2007. Two Decent Work Country Programmes (2006-07 and 2008-09) focused on strengthening collective bargaining, integrating vulnerable groups into the labour market, improving occupational health and safety, and supporting pension reforms.  

Since then, the cooperation has focused on specific technical assistance requests, such as the establishment of a minimum wage fixing system, compliance with fundamental labour standards in the textile and manufacturing supply chain of the country, and alternative labour dispute resolution systems.  

 Text last updated 04/2024