Bulgaria: EIB Group Survey on investment in Bulgaria presented at conference in Sofia

Bulgaria Greece gas interconnector + EIB Investment Conference

Bulgaria Greece gas interconnector + EIB Investment Conference

EIB Group Survey on investment in Bulgaria presented at conference in Sofia



[Sofia, Bulgaria]

  • Investment gaps persist despite strong, but mainly consumption-driven, economic growth in recent years
  • Only 64% of firms made investments in the last financial year compared to 87% EU-wide
  • The lack of workforce with relevant skills and uncertainty about the future are the main barriers to investment
  • The share of finance-constrained firms in Bulgaria is among the highest in the EU, which means most companies rely on internal sources to support their development  

The European Investment Bank (EIB) held today a conference in Sofia in partnership with the Chambers of Commerce of Austria, France, Germany, Greece and Italy. At the event, the 2018 results of the annual EIB Investment and Investment Finance Survey (EIBIS) were presented, which, together with the EIB Investment Report, provides an overview of the cyclical and structural dynamics behind investment in Europe.

Head of EIB’s Division, Economic Studies Pedro de Lima commented: “the EIB Investment Survey (EIBIS) sends a clear message:  despite positive economic growth in Bulgaria, limiting factors persist, such as insufficient investment by firms, mainly caused by a shortage of skilled labour, and uncertainty about the future. To keep a sustainable growth path, Bulgaria has to upscale its growth model. It needs to create a stable and business-friendly environment for its firms and entrepreneurs while establishing incentives for further investment in intangibles and innovation, building on the existing pockets of excellence. The conclusions of the unique EIBIS survey help us to understand better how to address the needs of businesses in Bulgaria and how the EU bank can play a role in facilitating access to finance”.

The EIB Group Survey on Investment and Investment Finance (EIBIS) provides unique insights into Bulgarian firms’ investment activity, their plans and views on what holds back investment. Based on its findings, the Sofia conference focused on a broader debate on the capacity of Bulgarian firms to invest and innovate, the availability of financing sources for investments and the role of EIB financial instruments in supporting long-term investment. The topics of the discussion were related to Bulgaria’s options to improve its growth and convergence prospects.

EIBIS data for 2018 confirms observations from the previous two years regarding low corporate investment activity. Bulgaria has one of the highest levels of non-investing firms in the EU (only 64% of firms invested in the last financial year compared to 87% EU-wide). Nearly a fifth of Bulgarian firms assess their investment over the past three years as insufficient. As a result, the quality of corporate fiscal assets is relatively low:  the share of state-of-the art machinery and equipment of Bulgarian firms is only half of the EU average.

Bulgarian firms are less optimistic about investment in 2018 than they were in 2017 and their investment plans are centered on the replacement of tangible assets. Investment in intangible assets is well below the EU level (22% versus 36%). The lower share of investment in intangible assets reflects the low share of innovative companies in the country. A closer look at firms’ innovation activity in Bulgaria shows that innovative firms rely mostly on adopting innovation rather than developing it.

The obstacle to investment mentioned most often in Bulgaria (84% of all firms) is the lack of staff with relevant skills. Uncertainty about the future is the second-largest obstacle. Obtaining external finance also remains a difficulty for Bulgarian firms. The share of finance-constrained companies in Bulgaria is among the highest in the EU. As a result, reliance on internal financing sources remains high compared to EU peers. 

This country overview presents selected findings based on interviews with 476 firms in Bulgaria in April-August 2018. The survey is part of the annual EIB Group Survey on Investment and Investment Finance (EIBIS), which is an EU-wide survey of 12 500 firms that gathers quantitative information on investment activities by both SMEs and larger corporates, their financing requirements and the difficulties they face.