SOFIA, Feb. 5 (Xinhua) -- Boosting business productivity and addressing fiscal pressures would unlock stronger and more resilient growth in Bulgaria, according to a report released by the Organization for Economic Co-operation and Development (OECD) on Thursday.
According to the OECD Economic Survey of Bulgaria, which was presented to journalists in the building of the Council of Ministers, Bulgaria's income has continued to converge with the OECD advanced economies, albeit at a slower pace than some economies in the region and the productivity gap remained relatively large.
"Bulgaria has steadily narrowed income gaps with OECD countries in recent years," said OECD Secretary-General Mathias Cormann, who presented the survey.
"Public debt is low, though prudent fiscal policy is needed now to maintain longer-term fiscal sustainability and help reduce elevated inflation," Cormann said.
Boosting business productivity, in particular by lowering barriers to market entry, and improving the school system should be key structural policy priorities, Cormann said.
According to the survey's key messages, a front-loaded fiscal consolidation needed to be implemented. "In the longer term, Bulgaria needs to address fiscal pressures from defense spending, the green transition, ageing and the need to make investments, including through strengthening efforts to reduce informality and increase tax compliance," it said.
Meanwhile, business investment and productivity would be boosted by improving the business environment and removing obstacles to setting up a new business, more effective supports for business and innovation, boosting competition and stepping up the fight against corruption, the report said.
It also said that informality and perceived corruption, including through political influence, were barriers to investment and business.
Competition was relatively weak, and profit margins were high in some sectors. Competition should be fostered in industry segments where feasible technically and economically, it said.
"Innovation is low and the take-up of digital technologies lags other countries. Public research spending should be increased and a targeted system of supports for business innovation developed," it said.
According to the OECD, improving human capital was key to raising Bulgaria's productivity and creating high-quality jobs. "Acquiring strong basic skills at school is vital to the skills of the workforce and the ability to adapt to meet the changing needs created by new technologies... More efficient spending of public funds and greater involvement of business, alongside a well-enforced curriculum reform, would all work towards better education and labour market outcomes," it said.
