Bulgaria, a fast-evolving EU member, is poised for continued economic growth by leveraging its strategic location, skilled workforce, and competitive cost base. Despite persistent challenges such as emigration and bureaucratic inefficiencies, the country’s economy expanded by 3.5% in 2023. This growth outpaced many of its European peers. To sustain and accelerate this momentum, Bulgaria must prioritize high-potential sectors that align with both domestic strengths and global demand trends.
Key areas include information technology (IT), energy infrastructure including renewables, gas pipelines, nuclear power, and refining, agribusiness, advanced manufacturing, tourism, and a rapidly growing defense industry. These sectors reflect Bulgaria’s strategic relevance and industrial capabilities and offer clear pathways to job creation, foreign investment, innovation, and long-term export growth.
Information Technology
Bulgaria’s IT sector is a standout, growing 12% annually and contributing 5% to GDP. With over 80,000 IT professionals and a reputation for quality software development, Bulgaria is a nearshoring hub for European and US firms. Companies like SAP and VMware employ thousands in Sofia, where 90% of IT workers speak English. The sector’s export value reached €3 billion in 2023, driven by software, cybersecurity, and AI solutions.
To scale, Bulgaria should expand tech education. Currently, 5,000 IT graduates enter the workforce yearly, but demand exceeds supply by upwards of 10,000. Initiatives like Telerik Academy, training 2,000 students annually, could be replicated. Investing in tech parks, like Sofia Tech Park, and offering tax incentives for startups will attract more foreign investment. Fostering AI and blockchain innovation could position Bulgaria as a regional tech leader.
Energy Infrastructure: Renewables, Gas, Nuclear, and Refining
Bulgaria is executing a diversified energy strategy to reduce dependence on Russian supply and transition toward secure, competitive sources. The Interconnector Greece–Bulgaria (IGB), operational since 2022, has expanded Bulgaria’s access to non-Russian gas. Plans are underway to increase its capacity from 3 to 5 billion cubic meters annually, and by 2026, Bulgaria aims to import up to 8 billion cubic meters of gas from Greece. These efforts are reinforced by the opening of a floating LNG terminal near Alexandroupolis in late 2024, supplying Bulgaria and neighboring countries.
At the same time, Bulgaria has committed to expanding its nuclear capacity. In November 2024, Hyundai Engineering & Construction and Westinghouse signed contracts to build two new AP1000 nuclear reactors at the Kozloduy plant. Together they will add 2,300 megawatts of carbon-free base load energy, with operations expected to begin in 2035 and 2037.
A major step in refining is also underway. In early 2025, a parliamentary proposal was introduced to acquire the Lukoil Neftohim Burgas refinery using a public-private partnership model, with approximately 3 billion leva in state-backed financing. Although not yet approved, this proposal aims to lower fuel prices and nationalize critical energy assets. Competing bids have come from KazMunayGas, Hungary’s MOL, and a Qatari-British consortium. The government has already imposed a 60% tax on refinery profits and restricted exports derived from Russian crude to encourage the sale.
Meanwhile, renewable energy continues to grow. Bulgaria aims to reach 30% renewable electricity by 2030, up from 20% in 2023. In 2023 alone, 1,200 megawatts of solar and wind capacity were added, aided by 500 million euros in EU funding. Projects such as a 500megawatt solar facility in Stara Zagora are attracting U.S. investors. To accelerate this growth, Bulgaria should streamline permitting timelines, invest in grid capacity, and expand vocational training for green energy workers.
Agribusiness
Agriculture, employing 20% of Bulgaria’s workforce, is a traditional strength with modern potential. The country is a top exporter of sunflower oil, lavender, and organic products, with €2billion in exports in 2023. Fertile soils and a favorable climate support diverse crops, while EU subsidies (€800 million annually) drive modernization.
Investing in precision agriculture, like drone-based crop monitoring, can boost yields by 15%, as seen in Poland. Organic farming, growing 10% yearly, aligns with the European demand for sustainable food. Bulgaria should also expand food processing, adding value to raw exports. Supporting small farmers through cooperatives and digital marketplaces will enhance competitiveness, creating 5,000 jobs by 2027.
Advanced Manufacturing
Manufacturing, contributing 15% to GDP, is evolving toward high-tech production. Bulgaria produces automotive parts, electronics, and machinery for firms like Siemens and Ford. Low labor costs (40% below the EU average) and EU market access attract investors. In 2023, foreign direct investment in manufacturing reached €400 million, up 12%.
To grow, Bulgaria should focus on automation and Industry 4.0 technologies, like robotics, which could increase output by ~20%. Vocational training, currently serving 10,000 students annually, needs expansion to meet demand for 15,000 skilled workers. Special economic zones (offering tax breaks) can lure more firms. Strengthening supply chains, disrupted by recent global crises, will ensure resilience.
Tourism
Tourism, generating 12% of GDP, is a proven performer with untapped potential. In 2024, Bulgaria welcomed 11 million visitors, up 7%, driven by the Black Sea coast, ski resorts, and cultural sites like Plovdiv. Rural and eco-tourism are emerging, with the Rhodope Mountains drawing adventure seekers.
Investing in sustainable tourism, like eco-lodges, can tap into the 60% of travelers prioritizing green destinations. Upgrading infrastructure, such as Varna Airport, and promoting year-round attractions will boost arrivals. Training for hospitality workers, currently short by 8,000, is critical. Digital marketing, leveraging platforms like #VisitBulgaria, can target markets like the US and Asia, increasing revenue by 10% by 2026.
Defense Industry
As regional instability grows, Bulgaria’s defense sector is rapidly expanding. Investment is focused on modernization of military infrastructure and production capacity, with increased collaboration between the government and private manufacturers. Partnerships with NATO allies and Israel have supported growth in Bulgaria’s defense exports and supply chain integration.
The rising demand for border security, surveillance, and unmanned systems, driven in part by the pressures of illegal immigration and instability in neighboring regions, has led to renewed attention to domestic production. With the right investment incentives and export strategy, Bulgaria could become a key supplier of defense technology in Southeastern Europe.
Challenges and Enablers
Bulgaria must overcome several persistent barriers. Since 2007, over 1 million citizens have emigrated, draining the domestic talent pool. Competitive wages (IT salaries currently average 2,000 euros per month, half of Germany’s) along with improved quality of life are essential to retaining young professionals.
Bureaucracy remains a bottleneck, slowing permitting, approvals, and digital transformation. Accelerating efforts to digitize 80% of government services by 2025 will reduce friction for investors and entrepreneurs. Infrastructure upgrades, particularly in energy and transport, require continued EU-backed financing and efficient delivery.
Government support through tax incentives, public-private partnerships, and regulatory reform is critical. Models from Estonia’s digital transformation and Denmark’s renewable energy success offer guidance. National campaigns to promote careers in high-demand sectors can further help reverse brain drain and inspire a new generation of skilled workers.
Conclusion
By investing in high-growth sectors such as technology, energy, agribusiness, manufacturing, tourism, and defense, Bulgaria is positioned to generate sustainable economic growth and attract global investment. With thoughtful reform and strategic infrastructure development, the country could create more than 50,000 new jobs by 2030 and significantly boost exports. Leveraging its EU membership, strategic geography, and evolving industrial base, Bulgaria has a genuine opportunity to emerge as a regional economic leader in the next decade.