Sofia Makes All the Difference
Nikolay Slavkov*
This article compares Northern and Southern Bulgaria based on three major income and standard of living indicators:
- GDP per capita
- Average annual household income
- Average annual gross salary
According to some economists a true comparison between North and South Bulgaria cannot be made without excluding the impact of the capital city Sofia of the analysis data. For years, Sofia-city has differed from any other region in the country and it is claimed that the better results shown by South Bulgaria is solely the result of this. So here after the comparison of South and North Bulgaria we added another indicator that excludes Sofia-city from the South Bulgaria.
Since the year 2000 the gap between North and South Bulgaria is constantly increasing and this effect accelerates with the onset of the economic crisis in the country in 2009. What is interesting, however, is the data for South Bulgaria excluding Sofia. It shows that there is a similar development in the region and North Bulgaria, but again a change occurred with the onset of the economic crisis in 2009. It is obvious that the economies in North Bulgaria received a more serious blow by the crisis and then they gradually managed to overcome the consequences of the economic shock and reach the average level of GDP per capita in South Bulgaria (except Sofia) in 2014. The probable cause of the deeper crisis in Southern Bulgaria (excluding Sofia) is, on one hand, the fact that the main economic centers that attract investments are located there. On the other hand, in North Bulgaria the prerequisite for the lack of such investments is the poor demographic structure and poor infrastructure which is also an obstacle to a more rapid recovery in the region after the crisis.
The dynamics of wages in the Southern and Northern region is also interesting. As expected, the gap between South and North Bulgaria is deepening and over the years this trend has been sustainable. It can be seen be observed, however, that comparing wages in South Bulgaria to the ones in North Bulgaria after Sofia-city is excluded from the southern part of the country, that both series have relatively identical trends over the years with minor differences. The data are surprising against the overall worse economic development of the North, and probably can be attributed to a certain arbitration of the labor force, for instance due to internal migration between regions, wages on both sides of the Balkan are almost equalized.
The last indicator used to compare the two parts of the country is household income. The capital is again the area that pulls Southern Bulgaria ahead and maintains the difference between South and North Bulgaria. In the statistical series where the capital is not included, however, there is a lag , albeit a slight one. This is due to the fact that here not only gross wages are included, but also some other indicators such as pensions, other compensations and other welfare, rent income and other income, where North Bulgaria has had an edge in the last years.
Apparently, when the the capital is exuded from the data, North Bulgaria does not yield to the southern part of the country according to any of the three indicators compared here. Unfortunately, this supports the claim thatat the better results of the south Bulgaria are owed to the capital, despite the rapid growth of Burgas and the major investments attracted by Plovdiv and Stara Zagora.
*Intern at IME
