Scaling Up Quality Public Investment for Stronger Growth: Bulgaria
Selected Issues Papers, December 5, 2025
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- Scaling Up Quality Public Investment for Stronger Growth: Bulgaria
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Bibliographic details
- Authors: Vahram Stepanyan, Iglika Vassileva
- Published: December 5, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229032544.018
Executive summary and purpose
- Discusses Bulgaria’s public investment needs and its efficiency and assesses prospects for accelerating economic growth and income convergence through scaling up quality public investment.
- Highlights that utilizing substantial EU grants to fund public investment offers Bulgaria a unique opportunity to finance important infrastructure projects without relying on debt.
- Identifies slow absorption of EU grant funds and inefficiencies in public investment management as significant challenges.
Key findings and quantitative projection
- Using the DIGNAR model calibrated to Bulgaria’s economy, simulations suggest that full EU funds absorption and improved public investment efficiency could boost GDP by 2.3 percent in 2030.
- Emphasizes the critical role of efficient public investment in boosting productivity and fostering sustainable growth.
Analysis and mechanisms
- Scaling up quality public investment raises productivity and supports sustainable economic growth and income convergence.
- Financing infrastructure with EU grants reduces the need to rely on debt financing, presenting a fiscal and development opportunity for Bulgaria.
- Slow absorption of grant funds constrains the timely delivery and impact of investment projects.
- Inefficiencies in public investment management blunt the potential growth benefits of increased funding.
Policy recommendations and reforms
- Steadfast reforms to accelerate EU fund absorption.
- Improve public investment efficiency through:
- Enhanced investment planning.
- Improved procurement processes.
- Strengthen public investment management to translate available EU grants into higher-quality, timely infrastructure spending that boosts productivity.
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- Scaling Up Quality Public Investment for Stronger Growth