THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Bulgaria

Ranked 57th of 149

At a glance

Ranks

57 th on the Legatum
Prosperity Index™

73rd
71st
78th
39th
91st
48th
66th
111th
41st

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, Bulgaria performs best on Education and Natural Environment and scores lowest on the Social Capital sub-index.

Visit our Rankings table to see how Bulgaria compares to other countries.

Prosperity Gap

The ‘Prosperity Gap’ takes a country's GDP and uses it as the yardstick to measure a nation's expected Prosperity Index ranking.

Bulgaria has maintained its prosperity deficit and made little progress towards closing its prosperity gap over the past decade. It is held back by poor governance, corruption, and it continues to lack the business dynamism of other Eastern European peers.

Note:
In the chart above, each dot represents a country. The curve shows the general tendency with which prosperity increases as GDP per capita increases. If a country falls below the curve, then we can say that compared to all other countries, it is under-delivering prosperity for its citizens. Likewise, if a country rises above the curve, then we can say that it is over-delivering prosperity for its citizens. Learn more about the Prosperity Gap here.

Alternatively, have a look at the Prosperity Gap view on our Rankings table for a full list of countries and to see how each of them are performing on the various sub-indices.

Commentary

The Prosperity Index captures Bulgaria following the effects of the 2008 financial crisis which hit the economy relatively severely. Its GDP fell by about 5% and unemployment rose steadily by about 6%, affecting 11.6% of the population in 2016. Nevertheless, this is a slight improvement over 2013 levels when unemployment was at 12.9%. The economy has since stabilised and returned to growth, but it is weak: there has been a lack of concerted policy efforts to further boost growth and competitiveness. Corruption is an issue, constraining the economy with vested interests. Bulgaria’s anti-monopoly policies are deemed the least effective in the EU according to the Prosperity Index. Widespread and increasing poverty is a considerable cause for concern. 22% of the population live below the national poverty line, while 2% live below the absolute poverty line, the highest percentage in the EU. Only 5% of people polled felt they were living comfortably on their current income.

Bulgaria must take measures to alleviate its poverty rate which is considerably greater than the EU average.
Bulgaria must take measures to alleviate its poverty rate which is considerably greater than the EU average.

In the Business Environment sub-index, Bulgaria has moved down 6 ranks to 71st. Although improvement has been made in the country’s business environment, Bulgaria underperforms in comparison to neighbouring Romania, ranked 41st, and to many of its Eastern European peers. It is, however, easier to afford financial services and to resolve insolvency than it was in 2007, though it is more difficult to get credit. Notably, it has the lowest personal and corporate income tax in the EU.

Bulgaria has seen a particularly worrisome decline in the Governance sub-index, moving down 25 ranks over the past decade to 78th. It is one of the most corrupt countries in the EU and has made little progress in challenging corruption. Romania, by contrast, has seen its Governance improve over the same time period. Romania set up an agency to crackdown on corruption, jailing more corrupt politicians than its Eastern European peers combined, resulting in an improvement in Transparency International’s Corruptions Perceptions Index. Bulgaria also has the lowest rule of law recorded in the EU, though has made progress in recent years. Organised crime remains an issue.

Bulgaria’s biggest improvement comes in the Natural Environment sub-index, moving up 66 ranks to 41st since 2007. There has been a significant reduction in air pollution: while in 2007, 41.2% of the population was exposed to pollution above WHO guidelines, today it is only 15.5%. Progress has also been made in the treatment of wastewater. Tourism is a growing industry in Bulgaria, particularly on its coastal areas, so environmental conservation is of increasing importance. 36.6% of Bulgaria’s land area is currently protected, 27% more than ten years ago.


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Data

How to read this graph:
When comparing multiple countries on a spider chart, data points that appear
further away from the center represent a better performance to the points that are closer to the center.