site.btaEurochambres Poll: Bulgarian Industries Optimistic about Economic Development in 2023

According to Eurochambres annual survey, the business climate in Bulgaria is expected to improve in 2023, with estimates for the same level as in 2022 and those with a positive trend prevailing against the backdrop of negative expectations. Business confidence in Europe is at a historic low for 2023 - even lower than during the 2008-2009 financial crisis and at the height of the pandemic.

Concerns about insufficient access to energy and raw materials, low numbers of skilled workers, and labour costs are among the key challenges shaping the conclusions, based on the opinions of over 42,000 companies in 25 European countries.

The Bulgarian Chamber of Commerce and Industry (BCCI) is a partner of Eurochambres' in the survey for the 24th consecutive time.

More than 800 Bulgarian entrepreneurs shared their expectations. The alarming results of the survey are a consequence of the unprecedentedly strong headwinds faced by businesses across Europe due to the impact of the COVID pandemic, the ongoing war in Ukraine, and inflation caused by energy costs. All EES2023 indicators show that businesses expect the situation to worsen before it gets better.

Results from Bulgaria, however, show more favourable expectations for 2023 for almost all indicators. Against the backdrop of negative prospects at the European level, the business climate in Bulgaria is expected to improve in 2023. It will be difficult to reach the positive expectations for improved business climate in 2020 (based on a survey from September 2019), when expectations were positive and did not predict the pandemic.

Entrepreneurs are struggling with rising wages and production costs, as well as uncertainty about supply chains and economic prospects. Reflecting this, at European level, there has been a sharp year-on-year decline in export, employment and investment expectations, while domestic sales forecasts are slightly lower than a year earlier. For Bulgaria, however, expectations related to domestic and foreign sales, increased employment and investments are at better levels compared to last year's survey.

The positive assessments related to maintaining and increasing investment are linked to the high expectation of companies' access to funds from the National Recovery and Resilience Plan. At the same time, the country suffers chronic shortages of all types of workers in almost all sectors of the economy. Those, who are going to hire in 2023 outnumber those who intend to lay off - despite the crises, unemployment continues to be very low.

The main challenges present in Bulgaria in 2023 are expected to be related to the affordability of energy and raw materials, followed by the lack of personnel, and labour costs. Sustainability requirements are not yet seen as one of the major challenges by Bulgarian entrepreneurs, but in other European countries they are on the agenda. According to the President of Eurochambres, Luc Frieden, "Massive investment in renewable energy as well as a competitive business environment are what business in Europe needs in these difficult times".

BCCI believes that a combined EU effort is needed to help businesses cope with the high energy prices, to improve energy efficiency and to provide affordable and reliable renewable energy. Action is needed to tackle the remaining barriers in the single market, to create further opportunities for growth, as well as to create a proactive and ambitious EU trade agenda and regulatory process that enhances enterprises' ability to compete.