Exports of goods – an important factor for the economy

Over the past year, things seemed calmer in economic terms, but there was no shortage of problems. There was civil dissatisfaction with the general appreciation of life. Demands for a better standard of living, higher wages and pensions have proved to be economically ineligible at this stage. The level of productivity in Bulgaria (both labor and capital) is still far behind in comparison with the more developed European economies, which does not allow for a tangible increase in the pay, which is at the root of public discontent. However, another unpleasant factor is that the main reasons for the declining inflow of foreign investment (shortage of skilled personnel; poor infrastructure; clumsy administrative services) are beginning to become a sustainable feature of the economy.

However, the economic outlook for Bulgaria for this and the next two years is rather positive.

It is well known that the Bulgarian economy is open and highly dependent on external demand and financing. Given the heightened trade war, it can be assumed that world trade volumes will be detained and even reduced. External financing will be the main source of funding for European programs, which are expected to increase steadily over the forecast period. However, the risks are high because it is not yet clear how Brexit will affect the common European market. As a small and open economy, Bulgaria is highly dependent on the external sector and one of the important components in building its stability is the export-oriented growth model.

What are the reasons for the advantages of export-oriented growth models?

The internal costs for the provision of a foreign currency unit are lower than the costs of saving the same unit.

The entering of local producers in foreign markets leads to competitiveness and promotes efficiency and cost savings. 

The significant increase in foreign direct investments and export-oriented economies has been proven.

There is no doubt that developing countries (at least at some stage in their development) cannot do without the development of export industries. The question is in what context is export stimulation considered.

From this point of view, international trade should revolve around the idea of economic development and not seek comparative advantage in different activities and industries at all costs. This often leads to negative effects in the long run.

The arguments presented are indisputable proof of the need for the Bulgarian economy to expand its small and medium-sized businesses, as well as its export markets.

The Big Arena Fulfillment Center helps reduce this shortfall by enabling traders to provide comprehensive logistics in over 26 European countries.

Our team strongly believes in the personal responsibility of every Bulgarian trader for the contribution to the economic development of our country. Therefore, one of our most important missions is to empower small, medium or large business owners to scale up.

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