Bulgaria has fallen out of the top 50 countries worldwide in terms of economic freedom, according to the latest survey published by Canada’s Fraser Institute. For the third consecutive year, Hong Kong, Singapore and Switzerland occupy the top three positions in the Economic Freedom of the World 2024 ranking, while Bulgaria’s performance has declined, indicating a setback in the nation’s economic freedom.
This trend is echoed in the recently released report by the Forum for Economic Freedom (FII), titled “Economic Freedom in Bulgaria: Overview and Recommendations for Growth”, which examines the country’s economic performance over the past three decades and identifies reasons for its decline relative to successful examples in Central and Eastern Europe.
In this year’s report, Bulgaria received a score of 7.16 out of a maximum of 10, placing it 52nd globally. The country continues to struggle most significantly in the legal system and rule of law category, lagging behind all other Central and Eastern European nations. Post-pandemic, Bulgaria has also seen a reduction in government size and business regulations. Furthermore, the report indicates a notable decline in monetary stability, primarily attributed to high inflation rates in 2022 and 2023. These factors combined have resulted in Bulgaria’s drop in economic freedom, as it no longer ranks in the top 40 in any of the five leading categories of the survey.
The FII’s report highlights that, over the past 25 years, Bulgaria has made strides in economic freedom, enjoying nearly continuous growth and significant improvements in convergence indicators with major European economies. However, the decline in economic freedom in the years following the pandemic presents a serious challenge to future development potential. Amid a prolonged political crisis and approaching parliamentary elections, the evaluations of economic freedom serve as a guide for prioritizing policies that could foster growth.
To enhance economic freedom, a commitment to maintaining macroeconomic stability and fostering a favorable business environment is essential. This includes addressing macroeconomic imbalances, reducing state intervention in certain areas and implementing policies that support competitiveness. Additionally, sound budgetary policies, adherence to fiscal rules and low direct taxation are critical. It is imperative to focus on reducing regulatory burdens and curbing nepotism, cronyism, and discrimination within public administration. Efforts to implement effective anti-corruption policies and safeguard judicial independence are also paramount.
The annual Economic Freedom Around the World survey by the Fraser Institute assesses the level of economic freedom in 165 countries. Findings reveal that the freest nations tend to be at least eight times wealthier than the least free countries and more than twice as wealthy as those in the second quartile of the ranking. Moreover, the incomes of the poorest 10% in the freest countries are significantly higher, illustrating how economic freedom can lead to greater prosperity and opportunities for all societal groups while narrowing inequalities. Additionally, life expectancy is notably higher in the freest nations, averaging over 80 years, in contrast to only 65 years in the least free countries. (Novinite)