The UK and Bulgaria pledged to build better trading links as part of a joint declaration on their strategic partnership published last week (October 27).
The commitment comes with a focus on technology and digital development, with plans to “deepen the UK-Bulgaria relationship in research, innovation and technology and create an environment that promotes digitalisation and digital trade”.
Speaking ahead of the declaration’s publication, UK foreign secretary James Cleverly said:
“This strategic partnership cements our commitment to strengthening our cooperation in areas like trade, education and technology, which will help to grow both of our economies.”
Economic cooperation
Commitments to strengthen trade ties included fostering a business environment conducive to greater trade and investment.
The UK will focus on supporting “entrepreneurs, start-ups, small and medium enterprises, as well as new and sustainable businesses” to export. This will be encouraged by promoting Bulgaria as a nearshoring destination to UK businesses.
Supply chain management firm Good Logistics noted that the following items are key Bulgarian exports: copper, oil, wheat, sunflower seeds, automotive parts, and clothing and footwear.
OECD membership
The declaration also saw the UK commit to supporting Bulgaria’s ambition to join the Organisation for Economic Cooperation and Development (OECD).
Bulgaria’s Ministry of Foreign Affairs has positioned accession to the OECD as a foreign policy priority. The OECD Council opened discussions with Bulgaria on joining the organisation in January 2022, before offering a formal roadmap to membership in June that year.
Economic performance
Like many European countries, Bulgaria has seen its growth impacted by Russia’s war in Ukraine, according to the OECD.
Although it relies predominantly on domestic energy supplies generated by nuclear and coal power, the economic ramifications of the war hit Bulgaria’s trading partners, resulting in a fall in exports.
Growth slowed to 2% in Q1 2023 and is projected to only hit 1.9% for the year. However, this is expected to recover in 2024, reaching 3.2%.
Today’s trade
UK-Bulgaria trade in the year to March 2023 was worth £3.7bn, according to October’s Department of Business and Trade data, of which the majority – £2.7bn – was comprised of Bulgarian imports. This represented an increase of 83% on the previous year.
UK exports to Bulgaria also grew more modestly to £1.05bn, an increase of 36.7% on 2022 figures.
The UK’s foreign direct investment in Bulgaria stood at £264m, with a reduction of barriers to further investment pledged in the declaration.