The economy will slow its growth
Wages in Bulgaria will grow by an average of 8% in 2020, according to Euler Hermes, a commercial credit insurance company. However, rising wages will not solve the deepening problem of labor shortages. Unemployment is already at record lows and there are simply no more people in the labor market. Therefore, employment is expected to grow by only 0.2% in 2020 and unemployment to reach new lower record levels.
At the same time, analysts at the company are alarmed at the growing trend of slowing export growth in the country. As a result of slower wage and export growth, the economy is expected to slow to 3% in 2020, down from 3.7% in 2019.
One of the main drivers of Gross Domestic Product growth last year was the wage increase of nearly 12%. This, coupled with employment growth of 2.6%, has led to an increase in consumption in the country, which is by far the only driver of economic growth, according to company figures.