For 2024, the Composite Index "Economy in Light" (CIIS) reaches a value of 79.44 points, continuing the trend of lightening since 2010.
"Lightening the Bulgarian economy is a cause for the Bulgarian Industrial Capital Association. It is particularly important to note that in 2024, our work to limit and prevent the shadow economy and undeclared employment was identified as a best practice by the European Labor Authority. This is a very high assessment that deserves to be clearly stated," said the Chairman of the Bulgarian Industrial Capital Association, Mr. Rumen Radev.
The values of the Composite Index and the Sub-index "Employment in the Light" were publicly announced during the press conference held today under the project BG05SFPR002-1.005-0004 "A Comprehensive Approach to Ensuring Motivated Qualified Human Resources", co-financed by the ESF+ under the Human Resources Development Program.
The index increases by 1.44 points compared to 2023. An increase is reported in both its components - the statistical and the sociological.
"The main contribution to the improvement is the higher VAT collection rate, the expansion of non-cash payments, better control over excise goods and the relative stability of the labor market," specified Prof. Dr. Stefan Petranov, key expert on the project and head of the team that developed the two indices. "As a result, a stable trend of reducing the level of the shadow economy over the years is reported," he added.
"The MLSP relies heavily on the scientific approach that has been developed and implemented by the BICA over the years, allowing us to monitor progress in the fight against the informal economy through the calculation of this extremely important index. Through it, we track the trends of the informal economy and better understand the nature and reasons for its existence, so that we can implement measures to reduce it. And today we see a sustainable trend for improving the economic environment. This means that business and society are becoming more mature and increasingly intolerant of unscrupulous practices," said Ms. Natalia Efremova, Deputy Minister of Labor and Social Policy and Chairwoman of the Public Council "Economy in the Light".
The sub-index "Employment in the light" (SEIL) reports a decline, from 82.24 points in 2023 to 80.21 points in 2024, which is its lowest value since 2020. According to the presented analysis, the decrease is due to both a decrease in the statistical component and a decline in the sociological assessments of employers regarding labor market practices. The data clearly show that problems with "envelope" pay, non-declaration of real wages and additional work without employment contracts continue to be a structural risk for the labor market. The share of young people who are formally neither in education nor in the labor market remains worryingly high.
"I would like to draw attention to an often misinterpreted topic about these young people. Our analyses show that a significant part of them are actually working, but in unregulated and gray labor practices. They are among the most vulnerable victims of the gray economy, including through "envelope" payments." This is a systemic problem that requires a systemic response,” added Rumen Radev.
The 2024 analysis confirms that despite the reported brightening of the economy as a whole, the share of the shadow economy in Bulgaria remains relatively high. Key factors for this include the continued administrative intervention of the state in the labor market through the minimum wage and minimum social security incomes, the low efficiency of institutions, and high levels of corruption.
The results of the CIIS and SEIL for 2024 confirm the need for consistent and long-term policies aimed at limiting undeclared employment, improving the institutional environment, and strengthening the link between real income and social security. The data emphasize that brightening the economy cannot be achieved sustainably without targeted measures in the field of labor relations.
The press conference was led by the project manager Assoc. Prof. Dr. Milena Angelova, Secretary General of BICA, and was attended by Rumen Radev, Chairman of BICA, Natalia Efremova, Deputy Minister of Labor and Social Policy, Prof. Dr. Stefan Petranov, key expert on the project, Dobrin Ivanov, Executive Director of BICA, Rositsa Steliyanova, Director of Programs and Projects, experts working on the topic and journalists.
