Bulgaria in Global Value Chains: Leveraging Integration with the EU: Bulgaria

Selected Issues Papers, June 24, 2024

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As a small open economy, Bulgaria benefits from economic exchanges with global partners.
After a boost before the Global Financial Crisis and EU accession, Bulgaria’s integration in global value chains has been growing only modestly in recent years.
Integration remains particularly low with EU partners.
To capitalize on integration with the EU Single Market and opportunities from joining the euro zone and the Schengen area, Bulgaria should focus on enhancing non-cost competitiveness through governance improvements and investments in infrastructure and human capital.

Bulgaria experienced a boost in global value chain integration before the Global Financial Crisis and EU accession.
Growth in integration has been only modest in recent years.
Links with EU partners remain particularly low relative to potential.

Enhance non-cost competitiveness by improving governance.
Invest in infrastructure.
Invest in human capital.
Leverage integration with the EU Single Market, and forthcoming membership in the euro zone and the Schengen area, to exploit new opportunities.

Subjects: Balance of payments, Competition, Exports, Financial markets, Foreign direct investment, Global value chains, Globalization, Imports, International trade
Keywords: backward linkages, Bulgaria, Competition, EU accession, EU country, EU single market, Exports, Foreign direct investment, forward linkages, Global, global value chains, Imports, international trade, leveraging integration with the EU, links with EU, machine learning, SHAP values