02.02.2021
Regional profiles 2020 - analysis of the Institute for Market Economics
For the ninth consecutive year, the Institute for Market Economics presents "Regional Profiles: Development Indicators". This year the publication reveals the socio-economic condition of the districts in Bulgaria on the eve of the pandemic. The survey is based on 64 indicators that assess the economic and social environment in the 28 districts in the country.
In addition, the IME has published a special analysis "Covid-19 and regional labor markets in 2020", which examines in depth the impact of the crisis on the regions in the country. The presentation from the presentation of the research is available here.
All data are presented in the publication, as well as on the specialized page of IME - www.regionalprofiles.bg.
The pandemic marked the economic development of the regions in Bulgaria in 2020. The country entered the year of COVID-19 with very good economic indicators. Stable growth of 3-4% in the period 2015-2019 led to record employment in almost all areas and sustainable wage growth. Gross value added in the largest districts in the country - Sofia (capital), Plovdiv and Varna, reported an increase of nearly 10% (data for 2018). On the eve of the pandemic, the processes of transformation of the domestic economy were driven by the change in the industry - oriented towards higher added value, and by the growth in the digital sphere in the major economic centers.
The gross value added per capita varies from nearly BGN 29,000 in Sofia (capital) to less than BGN 7,000 in Silistra, Sliven and Vidin. The difference between the capital and the districts at the bottom is four times, and inside the country (excluding the capital) it can reach more than twice. The profile of regional economies is different. Sofia (capital) is dominated by services that carry 89% of value added. The tourist profile of Varna and Burgas also leads to a serious predominance of services - 71% in the value added of the leading maritime areas. The strongest industrial districts in the country - as a share of industry in value added, are Stara Zagora, Vratsa, Sofia and Gabrovo. The latter are determined by the large energy companies in Stara Zagora and Vratsa, the industry in the wide periphery of the capital and the traditional industrial profile of Gabrovo.
Investment activity remains concentrated in the leading economic centers - over 70% of foreign direct investment with accumulation and over 60% of the costs for acquisition of tangible fixed assets in non-financial corporations are in Sofia (capital), Plovdiv, Varna and Burgas. Although smaller in scale, the districts of Sofia, Gabrovo and Stara Zagora are doing well in terms of foreign direct investment. Despite the large differences in recent years, there has been strong dynamics in the so-called secondary centers. Industrial investments in districts such as Shumen and Targovishte to the northeast or Kardzhali and Haskovo to the south, as well as the entry of digital companies in districts such as Ruse and Veliko Tarnovo have increased investment activity outside major centers.
The unemployment rate (15+ years) in Bulgaria is below 5% in 2019. Unemployment by district, however, varies from 2-3% in Sofia (capital), Plovdiv and Varna to about 20% in Vidin and Montana. Unemployment rose in all areas of the country in 2020, as a result of the pandemic and the restrictions imposed. Restoring economic activity and job losses is one of the major challenges facing the regions this year. Areas that have more skilled workers will be in a better position to return to the pre-pandemic growth trajectory and focus on higher added value.
The study of the impact of the pandemic on the labor market (see here) shows that the dynamics of unemployment in 2020 follows closely the introduction and easing of restrictive measures in Bulgaria, and both spring and autumn "lockdown" are followed by a sharp increase in new registrations at employment offices.
The first peak affects the municipalities most severely, for which winter and spa tourism is key, as there is a significant dynamics in the stronger local economies. Only in Kardzhali the growth of the unemployed in the second "lockdown" is higher than in the first.
The unemployment rate as of December 2020 in most municipalities differs from the one reported in December 2019 by up to 2 percentage points.
Interesting trends continue to be observed in the field of education. Despite the pandemic effect and the temporary transition of students to distance learning, general trends and regional differences persist. The districts of Sofia (capital) and Smolyan continue to have the best indicators of the state matriculation exams in Bulgarian language and literature - an average of 4.63 and 4.53 in 2020. They are followed by Varna, Plovdiv, Gabrovo and Veliko Tarnovo. At the bottom, with estimates below the border of 4.00 are Shumen, Kardzhali, Silistra and Targovishte. In 12 districts, the share of grades below “average” 3 is over 10% of all students appeared.
The pandemic has brought healthcare to the fore. Indicators such as the number of hospital beds and access to doctors have become the most important for the quality of life in places. Regional differences are visible through the population's access to specialist doctors. While in some districts - Pleven, Sofia (capital), Plovdiv and Varna, there are less than 400 people per specialist, in others - Kardzhali, Yambol and Dobrich, there are about 700 people per specialist (data for 2018). The number of hospital beds also varies from over 9 beds per thousand people in Pleven to about 3 beds per thousand people in Dobrich, Shumen and Veliko Tarnovo.
The pandemic in 2020 affected both the economic and social indicators of the country's districts. The decline in economic activity will be seen in the macro data at the district level - for output, value added, investment and employment. In the social environment, there will inevitably be a change in healthcare, which is at the forefront against the coronavirus, as well as in demography - mostly due to higher mortality, but also due to the return of Bulgarians from abroad and the growth of registrations at the current address. settlements. Changes can also be expected in the fields of education and culture, due to the completely different work environment in 2020. The next edition of "Regional Profiles: Development Indicators" will be challenged to take into account all the nuances in the socio-economic development of the districts. during a pandemic.
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All analyzes, data and other materials related to the research can be found on the specialized website: www.regionalprofiles.bg
MONTANA DISTRICT
> Population (2019) 127 001
> Territory (sq. km) 3635.6
> Number of settlements 131
> Share of the population in cities (%) 64.3
Montana is among the areas with the lowest incomes and living standards, which determines the high share of poverty in the area. Unfavorable trends in the local labor market put Montana in last place in this category. The rise in economic activity in 2019 leads to an increase in the unemployment rate. Investment activity in the district is relatively weak. Montana performs well in the absorption of European funds. This is the area with the smallest share of highways and first-class roads in the country. The average level of local taxes in the municipalities in the district of Montana puts it in first place with the lowest taxation in 2020. The administration in the district receives relatively good grades. The continuing aging of the country's population is particularly visible in the Montana area. The natural growth rate in the district continues to decrease and is the second lowest in the country. The performance of the Montana district in terms of educational indicators is relatively weak. Access to doctors in the area is relatively high. The number of beds in the local general hospitals also remains higher than the national average. The maintenance of order and security is assessed as weak. The performance of the district in terms of environmental indicators is very good. The share of delivered waste for treatment and recycling remains high. Montana is the area with the least cultural life in 2019.
Income and standard of living
Montana is among the areas with the lowest incomes and living standards. Despite the low base, the gross domestic product per capita in the district is growing twice as slow as the national average and in 2018 reached BGN 9.0 thousand compared to BGN 15.6 thousand / person in the country. Wages and incomes are also growing relatively slowly. The average annual gross salary in the district is BGN 10.1 thousand (compared to BGN 13.8 thousand in the country), and in 2019 the income per household member is BGN 4,644 (compared to BGN 6,013 in the country). The low level of wages and incomes also predetermines the high share of poverty in the Montana region. In 2019, the share of the population living below the national poverty line is 47.4% - twice as high as the national average (22.6%). The share of the population living with material deprivation reaches 22.7% compared to 19.9% in the country.
ECONOMIC DEVELOPMENT
Labor market
Unfavorable trends in the local labor market put Montana in last place in this category in 2019. Economic activity increased significantly compared to the previous year, but remained lower than the national average - 68.6% compared to 74.3% in the country. Due to the problems on the labor market, however, the increase in economic activity only leads to an increase in the unemployment rate. In 2019, employment decreased by 4 percentage points. up to 48.2% and remains the lowest in the country with average values of 70.1%. At the same time, unemployment increased by 5 percentage points. to 20.4% (compared to 4.2% in the country) and ahead of the one in Vidin district, again putting Montana at the bottom of the rankings. The relatively low education of the labor force remains a huge challenge for the labor market. The share of graduates is almost three times lower than the national average - 10% compared to 28% in the country, and the share of the labor force with primary and lower education reaches 30% compared to 18% in the country. Both indicators have developed unfavorably in the last few years.
Investment and economics
Investment activity in the district is relatively weak. In 2018, Montana remains among the districts with the lowest number of enterprises - 36 per 1,000 people compared to 59 per 1,000 people in the country, as well as among the districts with the lowest volume of investment. The costs for acquisition of tangible fixed assets even decrease to BGN 1,157/person compared to BGN 2,750/person in the country. A decrease is also observed in foreign direct investment and their amount remains ten times lower than the average - 274 euros/person compared to 3560 euros/person in the country. Although there has been an increase in recent years, production in the district remains low - BGN 13.0 thousand/person compared to BGN 25.9 thousand/person in the country in 2018. On the other hand, Montana is performing well in the absorption of European funds. As of June 15, 2020, the value of the amounts paid to beneficiaries under the operational programs reaches BGN 2202/person (compared to BGN 1976/person in the country). Within the district the highest values are in the municipalities of Montana and Georgi Damyanovo.
Infrastructure
The density of the road and railway network in the district is around the national average. At the same time, Montana has the smallest share of highways and first-class roads - 9.8% compared to 18.6% in the country in 2019. Only 28.9% of the road surface is in good condition compared to 41.4% in the country. The population's access to the Internet is increasing and reaches 78% of households compared to 75% in the country.
Local taxes
The average level of local taxes in Montana municipalities puts the district in first place with the lowest taxation in 2020. In all five considered local taxes, the rates in Montana district are lower than the national average. The biggest difference is in the taxation of retail trade. In the municipalities of the district it is on average BGN 5.10 / sq.m. Compared to BGN 12.93 / sq.m in the country. The tax on the taxi transport in the district is lower by more than 33%, and by about 20% - on the vehicles and on the real estate of the non-legal entities.
Administration
The Montana administration received relatively good grades. Along with the increase in the country, the coverage of the cadastre is increasing and in 2019 the cadastral map already covers almost the entire territory of the district. In 2020, the self-assessments of local administrations for the development of e-government and for the provision of one-stop-shop administrative services will also increase. The transparency of the administration is assessed lower than the previous year, but remains higher than the national average in 2020. Within the district, the municipalities of Boychinovtsi, Berkovitsa and Chiprovtsi perform best on this indicator.
Demographics
The continuing aging of the country's population is particularly visible in the Montana area. The natural growth rate continues to decrease and is the second lowest in the country after that in Vidin district, reaching in 2019 -14.5 ‰ compared to -6.7 ‰ in the country. Emigration also contributes to the rapid decline of the district's population. In 2019, the coefficient of mechanical growth decreases to -6.1 ‰. These processes have a very negative impact on age dependence in the district. The ratio of the population over 65 to that of 0–14 years reaches 195% (compared to 150% in the country), and to that of 15–64 years - 44% (compared to 34% in the country). A relatively small part of the district's population lives in cities - 64% compared to 74% in the country. The population density in the urbanized territories is also among the lowest in the country - 894 people / sq. Km compared to 1510 people / sq. Km in the country.
SOCIAL DEVELOPMENT
Education
The performance of the Montana district in terms of educational indicators is relatively weak. In 2019, the enrollment rate in grades V – VIII decreased and reached 81.1% (compared to 86.6% in the country). The shares of second-year students and those who have dropped out of primary and secondary education are increasing and remain higher than the national average. The average success of students in the national external assessment in mathematics after seventh grade continues to be among the lowest in the country in 2020 - 27.8 points compared to 36.3 points in the country, but marked a slight improvement over previous two years. At the same time, the success of the state matriculation exams in Bulgarian language and literature is close to the national average. The average grade of students from Montana is 4.15 (compared to 4.20 in the country), and the share of poor grades is 6.5% (compared to 8.2% in the country). The relative number of teachers in primary and secondary education in the district increases with the average growth rate in the country and remains close to the average values. There are no universities or affiliates in the Montana area.
Healthcare
In the Montana area, access to doctors is relatively high. One local general practitioner cares for 1443 people (out of 1688 people per doctor in the country). The relative number of specialist doctors is close to the national average. The bed capacity in the local general hospitals also remains higher than the average. In 2019, the hospitals in the district have 688 beds per 100 thousand.
Order and security
Maintaining order and security in the Montana area is assessed as weak. Although the workload of local criminal judges is relatively low (one judge handles an average of 7.7 cases per month, compared to 9.1 cases per judge per month in the country), the administration of justice is relatively slow. In 2019, cases completed within 3 months will decrease to 80% (compared to 90% in the country), and pending cases will increase to 15% (compared to 10% in the country). Montana is among the areas with the highest crime rates. In 2019, the registered crimes against the person and property in the district exceed 13 per 1000 people of the population (compared to 11 per 1000 people in the country). However, their detection rate is increasing and again ahead of the national average.
Environment
The performance of the Montana region in terms of environmental indicators is very good in 2018. The volume of carbon dioxide emissions is ten times lower than the national average - 7.3 t/sq. km at 274.8 t/sq. km in the country. The generated waste also remains relatively small - 268 kg / person per year compared to 409 kg / person in the country. The share of delivered waste for treatment and recycling remains high - 95% compared to 71% in the country. The share of the population related to wastewater treatment plants remains extremely low (35.5% compared to 63.9% for the country), as well as the share of the population living in settlements with public sewerage (59.9% compared to 76.2% in the country).
Culture
Montana is the area with the least cultural life in 2019. Visits to local theaters and cinemas are increasing, but remain many times lower than the national average. The theaters reported 88 visits per 1,000 people (compared to 362 per 1,000 people in the country), and the museums - 155 per 1,000 people (compared to 770 per 1,000 people in the country). In 2019, for the first time in the district there is a cinema, and the visits are 97 per 1000 people - still far from the average values for the other districts (659 per 1000 people). Since 2015, there is no library in the district large enough to be included in the official NSI statistics.
