Bulgaria's demographic decline has had a strong negative impact on gross domestic product (GDP) growth since 2009, with an average negative effect of about 0.9 percentage points per year, according to an analysis by the Bulgarian Council for Economic Analyses (BCEA) on Demographic Challenges Facing the Bulgarian Economy, presented at the Council of Ministers building on Friday. This negative effect is equal to about 45% of the average annual GDP growth rate for the period 2010-2021.
It is driven mainly by emigration and changes in the age structure of the population. In the future, without changes in economic conditions and policies, this negative effect risks continuing and even increasing after 2035 due to accelerating population ageing, BCEA pointed out.
Population decline is due to global trends such as declining fertility and ageing, as well as country-specific factors such as negative natural increase rate and net migration. These trends have long-term economic implications for aggregate production, the labour market, social security and regional development.
Demographic indicators show negative trends: fertility remains below population replacement rate, despite its slow recovery since the beginning of the new millennium. The mortality rate in Bulgaria is among the highest in the European Union and life expectancy is the lowest at 74.2 years, compared to an EU average of 80.6 years.
The study also notes that fertility in Bulgaria has been characterized by a steady decline, which accelerated during the transition period after 1990. The economic crisis and growing political instability are one of the explanations for the sharp decline in fertility to such low levels. Cultural changes and the liberalization of attitudes towards family and reproduction, which are part of the emerging second demographic transition in Eastern Europe, are presented as another factor.
Since the beginning of the new millennium, there has been a slow recovery trend for Bulgaria as well as for other Central and Eastern European countries, with some fluctuations in fertility during periods of economic recessions. In recent years, fertility levels in Bulgaria have been higher than in other EU countries. Despite an increase in the average number of children per woman, the total fertility rate in Bulgaria remains below replacement level.
At the same time, the death rate in Bulgaria has been rising steadily for decades as a result of the process of population ageing, which started in the 1960s. The crude mortality rate in Bulgaria is quite high compared to other EU countries, even before the peak mortality observed during the COVID-19 pandemic.
The average life expectancy at birth in Bulgaria is the lowest compared to other European countries.
There are significant difficulties in tracking migration dynamics in Europe. These are related to institutional differences in the administrative recording of immigration and emigration for different countries. As a result, migration data are characterized by certain inaccuracies in the years between censuses, necessitating their updating after each new census. Since 2011, there has been a new acceleration in net emigration, reaching relative levels comparable to those of 1992.
After 2020, for the first time in many years, immigration became higher than emigration. This happened due both to the return of many Bulgarians during the pandemic and to the refugee flow from Ukraine after Russia's invasion in 2022.
Ageing is a serious medium- and long-term risk to the economy. The effects of net migration, due to the difficulty of accurately accounting for migration, pose the main short- and medium-term risk to the country's demographic outlook. If the 2012-2019 trend continues into the third decade of the 21st century, it will have a strong negative effect on GDP growth.
It is also noted that health policies are also needed because high mortality and low life expectancy stand out as demographic indicators with a particularly strong specificity for the country. According to the study, health policies are important direct measures to overcome these country-specific problems. The measures can be grouped into three categories: improving access to health care, expanding maternal and child health services, and improving the organization of care for the elderly, which would also have benefits, economic related activity with in economically depressed areas.