Bulgaria Ranks 23rd in Index of Economic Freedom 2022

Jerusalem, 8 September, 2022 (TPS) -- SOFIA, 08.09.2022 (BTA)
Bulgaria marks an unprecedented rise in the global ranking of economic freedom, ranking 23rd out of 165 countries and territories included in the Economic Freedom of the World: 2022 Annual Report, published on Thursday by the Institute for Market Economics (IME) together with the Canadian Fraser Institute, the IME said.

This 2022 edition is based on data from 2020 (the latest internationally comparable data for all countries). Once again, Hong Kong and Singapore top the rankings, followed by Switzerland, New Zealand, Denmark, Australia, the US and Estonia. At the bottom are Venezuela, Sudan, and Zimbabwe.

The study ranked Bulgaria in the first quartile – among the freest countries, but the country’s economic freedom rating has actually declined. Bulgaria’s rating is now 7.69 points (out of 10), down by 0.10 points from 2021.

The reason for Bulgaria’s climb in the ranking by 8 positions is in fact the deterioration of freedom in a number of countries. The average score of countries around the world has seen a record collapse of 0.16 points in 2020, compared to the 2019 score, which erases a decade of development and increases in economic freedom around the world. The decline is more than three times larger than that recorded in the immediate aftermath of the 2008-2009 financial crisis. Thus, the COVID-19 pandemic is becoming the biggest catastrophe for economic freedom globally, IME writes.

According to the IME, this is what allows Bulgaria to outpace many countries. While in 2020 most of the other EU member states were significantly increasing transfers and subsidies, taking on new debts, and printing money, in Bulgaria these negatives were delayed and on a relatively limited scale.

Outside of improving rankings due to deterioration in other countries, Bulgaria’s flat tax, currency board, EU membership, and a large number of banks have provided stability over the years and show high scores and a good ranking in the index.

There is no improvement in the weakest category for Bulgaria – Legal Structure and Property Rights. The country’s score is 5.96 points, or 0.02 points higher than in the previous edition of the report. The country’s performance in the impartiality of the courts, reliability of the police, and protection of property rights is particularly poor (all below 5 points). Thus, while in the other member states the scores are around 8 points, Bulgaria’s score is close to that of countries such as Uruguay, Bhutan, Mongolia, and India.

The weak legal system and protection of property rights hamper investment, entrepreneurship and long-term economic development and this cannot be compensated and overcome by better performance in other measures of freedom.